Code of Virginia

Creating a Report: Check the sections you'd like to appear in the report, then use the "Create Report" button at the bottom of the page to generate your report. Once the report is generated you'll then have the option to download it as a pdf, print or email the report.

Code of Virginia
Title 3.2. Agriculture, Animal Care, and Food
Chapter 47. Sale of Farm Produce
5/9/2021

Chapter 47. Sale of Farm Produce.

Article 1. General Provisions.

§ 3.2-4700. Definitions.

As used in this chapter, unless the context requires a different meaning:

"Director" means the Director of the Division of Marketing.

"Division" means the Division of Marketing of the Department of Agriculture and Consumer Services.

Code 1950, § 3-526; 1966, c. 702, § 3.1-685; 1978, c. 396; 1993, c. 115; 2008, c. 860.

§ 3.2-4701. Division of Marketing; administration; appointment of Director and assistants; responsibilities.

A. The Division is hereby established within the Department, and shall be administered under the supervision of the Commissioner by the Director, who shall be qualified for the performance of his duties by training and experience.

B. The Division shall:

1. Promote the economical handling, packing, storage, distribution, and sale of agricultural products in the Commonwealth; and

2. Assist producers and consumers in selling and purchasing agricultural products at a fair and reasonable price.

Code 1950, § 3-526; 1966, c. 702, § 3.1-685; 1978, c. 396; 1993, c. 115; 2008, c. 860.

§ 3.2-4702. Powers and duties of Director.

In the administration of the Division, the Director, under the supervision of the Commissioner:

1. Shall investigate: (i) the cost of food production and marketing; (ii) the market demand for the products of Virginia farms; (iii) the proximity of producers to the most profitable markets for their products; (iv) the transportation facilities; and (v) the most advantageous methods of packing, storing, and standardizing agricultural products;

2. Shall conduct analyses to determine whether the agricultural products of the Commonwealth are being subjected to unfair competition from agricultural products or manufactured substitutes;

3. May assist in the organization of cooperatives among producers and consumers, for the purpose of promoting and conserving the interest of producers of agricultural products in the sale and distribution of such products, and in the purchase of their necessary supplies;

4. May cooperate with federal officials, national, district, and state committees and supervisory bodies in enforcing codes and marketing agreements adopted under the federal Agricultural Adjustment Act (7 U.S.C. § 1281 et seq.) or other similar acts of Congress;

5. May enter into agreements with federal officials, national, district, or state committees or supervisory bodies for carrying out the provisions of this section or the Federal Agricultural Adjustment Act or other similar acts of Congress;

6. May appoint, supervise, and dismiss as inspectors or representatives of the Division those employees of his office as he may deem necessary for the enforcement and carrying out the purposes of subdivisions 4 through 7; and

7. May receive from the federal department or its subdivisions, national, district or state committees or supervisory bodies, or from other sources, fees or moneys for carrying out the purposes of subdivisions 4 through 7, deposit them in the state treasury, and expend such moneys for carrying out the purposes of these subdivisions.

Code 1950, §§ 3-527, 3-531; 1966, c. 702, §§ 3.1-686, 3.1-690; 1993, c. 115; 2008, c. 860.

§ 3.2-4703. Cooperation of U.S. Department of Agriculture.

In carrying out the provisions of this chapter, the Division shall endeavor to secure the cooperation and assistance of the U.S. Department of Agriculture. It shall analyze: (i) the methods suggested by the U.S. Department of Agriculture for the promotion of economical and efficient marketing of agricultural products; and (ii) statistical information applicable to the marketing of Virginia agricultural products. When it is advisable and not inconsistent with the requirements of this chapter or of any other law of the Commonwealth, the Division shall endeavor to adopt any methods of marketing that may be suggested by the U.S. Department of Agriculture.

Code 1950, § 3-530; 1966, c. 702, § 3.1-689; 2008, c. 860.

§ 3.2-4704. Regulations.

The Board may adopt any marketing agreement approved by federal officials under the federal Agricultural Adjustment Act (7 U.S.C. § 1281 et seq.) and similar acts of Congress.

1993, c. 115, § 3.1-690.1; 2008, c. 860.

§ 3.2-4705. Division to disseminate information.

The Division of Marketing shall gather and disseminate information on all subjects relating to the marketing and distribution of Virginia agricultural products, and shall keep producers and consumers informed of the demand and supply and at what markets the various agricultural products can be best handled or procured. The Division shall: (i) publish periodical bulletins that provide the current market prices for Virginia agricultural products in the principal markets of the Commonwealth, and in other markets accessible for the disposition of such products; and (ii) when advisable, provide information as to the available supplies of agricultural products the demand in several markets for such products. The Division may also prepare and distribute bulletins describing the most efficient and economical methods of standardization, storage, packing, transportation, and marketing of agricultural products. The Division shall determine the sources of supply of agricultural products and prepare and publish lists of the names and addresses of producers and consignors and supply this information to interested persons.

Code 1950, § 3-528; 1966, c. 702, § 3.1-687; 1993, c. 115; 2008, c. 860.

§ 3.2-4706. Finding markets for producers.

When notified by producers that agricultural products produced in the Commonwealth cannot be sold or will have to be sacrificed for lack of a ready market, the Division shall investigate and make suggestions to the producers, and may assist the producers in any practicable manner in finding a satisfactory market for the products in question.

Code 1950, § 3-529; 1966, c. 702, § 3.1-688; 1993, c. 115; 2008, c. 860.

§ 3.2-4707. Investigation and correction of improper practices.

The Division shall investigate delays, improper conditions, overcharges, and unfair rates in the transportation of agricultural products, and may institute proceedings in the appropriate courts for the abatement or redress of such injuries; and may institute proper proceedings to prevent restraint of trade or unlawful combinations to fix prices.

Code 1950, § 3-529; 1966, c. 702, § 3.1-688; 1993, c. 115; 2008, c. 860.

§ 3.2-4708. Penalty.

Any person violating any provision of this article, a regulation or marketing agreement adopted pursuant thereto, is guilty of a Class 3 misdemeanor.

1993, c. 115, § 3.1-690.2; 2008, c. 860.

Article 2. Commission Merchants.

§ 3.2-4709. Definitions.

As used in this article, unless the context requires a different meaning:

"Auction market," "livestock auction market," "livestock sales ring," "livestock auction," or "livestock auction ring" means a place or establishment operated for compensation or profit as a private or public market, consisting of pens, or other enclosures, and their appurtenances, in which livestock are received, held for sale or where livestock is sold or offered for sale either privately or at public auction.

"Commission merchant" means any person, who: (i) operates an auction market; (ii) receives farm products for sale on commission or contracts with the producer for farm products sold on commission or for a fee; (iii) accepts in trust from the producer for the purpose of sale; (iv) sells or offers for sale on commission; (v) solicits consignments of any kind of farm products; or (vi) handles the account of or as an agent of the producer any kind of farm products. No person shall be deemed to be an agent of the producer unless a specific price has been agreed upon by both parties before shipment or delivery by the producer for resale.

"Commission merchant" shall not include: (i) any cooperative corporation or association that is subject to the provisions of Article 2 (§ 13.1-312 et seq.) of Chapter 3 of Title 13.1; (ii) any association or organization of farmers, including produce exchanges, not incorporated under or subject to the provisions of Article 2 (§ 13.1-312 et seq.) of Chapter 3 of Title 13.1, organized and maintained by farmers for mutual help in the marketing of their produce and not for profit; (iii) any person buying vegetables, viticulture, or horticultural farm products for the purpose of reselling these products in dried, canned, or other preserved form; (iv) the sale of farm produce at public auction by a licensed auctioneer, acting as the agent of another to whom such farm produce is consigned; (v) the sale by sheriffs and other officers and fiduciaries and court officials; (vi) seed sold at retail; or (vii) persons licensed pursuant to the provisions of Article 3 (§ 3.2-4738 et seq.) of this chapter.

"Farm produce" or "farm products" means horticultural, viticulture, forestry, dairy, livestock, poultry, bee, and other products ordinarily produced on farms.

"Licensee" means any person who has been granted a license to operate, conduct, or carry on the business of a commission merchant.

Code 1950, § 3-534; 1966, c. 702, § 3.1-692; 1975, c. 505; 1977, c. 21; 2008, c. 860.

§ 3.2-4710. Certain activities exempt from article.

The provisions of this article shall not apply to: (i) the premises of any butcher, packer, or processor who receives livestock exclusively for immediate slaughter; (ii) farm sales; (iii) sales by 4-H clubs; or (iv) sales by livestock breeders' associations or by exposition societies.

Code 1950, § 3-534; 1966, c. 702, § 3.1-692; 1975, c. 505; 1977, c. 21; 2008, c. 860.

§ 3.2-4711. License required; application for license to be in writing; contents.

A. Every person who operates, conducts, or carries on the business of a commission merchant shall obtain a license.

B. Application for license shall be made to the Commissioner in writing, signed and sworn to by the applicant.

C. The application shall include:

1. The name of the locality where the business of commission merchant is to be conducted, the street and number of the building if practicable, and the nature of the products that will be handled by the applicant;

2. If made by a partnership, the full names of each of the partners comprising the partnership, and their respective addresses, and the firm or trade name under which the business is to be conducted;

3. If made by a corporation, whether it is domestic or foreign, the amount of its capital stock as provided in its articles of incorporation, the amount of its capital stock fully paid in, and the names of its officers and those persons authorized to receive and accept service of process and legal notices of all kinds for the applicant.

D. If requested by the Commissioner, an applicant shall demonstrate his character, responsibility, and good faith in seeking to carry on a commission merchant's business within the Commonwealth.

Code 1950, §§ 3-536, 3-537; 1966, c. 702, §§ 3.1-694, 3.1-695; 2008, c. 860.

§ 3.2-4712. Fee and bond to accompany license.

Applications shall be accompanied by a license fee of $10, and a good and sufficient bond, approved by the Commissioner, in the amount of $3,000 for all applications other than for livestock auction markets, in which case the application, together with the fee, shall be accompanied by a bond in the sum of $5,000, when the average daily gross commission business is $5,000 or less, with $1,000 added to the bond for each additional $5,000 average daily gross commission business done for the previous year with a maximum bond of $10,000 that entitles the applicant to a license to expire on December 31.

Code 1950, § 3-538; 1952, c. 387; 1966, c. 702, § 3.1-696; 2008, c. 860.

§ 3.2-4713. Applications for renewal licenses.

Each licensee shall renew his license. The renewal license shall expire one year from the date of expiration of the old license. The renewal application shall be accompanied by evidence of payment of the renewal premium continuing the bond in full force and effect, and the payment of a fee of $10 on or before the first day of January following the date of expiration of the previous license. All applications for renewal licenses shall be made in the same manner as application for original license.

Code 1950, § 3-539; 1966, c. 702, § 3.1-697; 2008, c. 860.

§ 3.2-4714. Disposition of sums received for licenses.

All sums received by the Commissioner for such license fees shall be paid into the state treasury to the credit of the general fund.

Code 1950, § 3-540; 1966, c. 702, § 3.1-698; 2008, c. 860.

§ 3.2-4715. Certified copy of license; fee; posting of license during sale periods.

A certified copy of an issued license may be obtained by the holder of the original upon payment of a fee of $1, and the original or a certified copy of the license shall be posted during sale periods in a conspicuous place on the premises where the business is conducted.

Code 1950, § 3-553; 1966, c. 702, § 3.1-711; 2008, c. 860.

§ 3.2-4716. Bond not required for certain auction sales of livestock.

No bond shall be required of any person operating a livestock auction market or stockyard that has been posted by the U.S. Department of Agriculture and is being operated under and pursuant to the terms and provisions of the Packers and Stockyards Act of 1921 (42 Stat. 159), as amended.

Code 1950, § 3-541; 1960, c. 250; 1966, c. 702, § 3.1-699; 2008, c. 860.

§ 3.2-4717. Agreements with U.S. Department of Agriculture; powers and duties of Commissioner as to bonds filed with U.S. Department of Agriculture.

The Commissioner may enter into agreements with the U.S. Department of Agriculture as are necessary to effectuate the purposes of the Packers and Stockyards Act of 1921 (42 Stat. 159), as amended. The Commissioner may act as trustee of the bonds or other security filed with the U.S. Department of Agriculture, and in such capacity the Commissioner may: (i) settle, allow or reject claims arising against the bonds or other security; (ii) rely on the investigative reports and recommendations of the U.S. Department of Agriculture; and (iii) use the administrative powers and processes of this article to settle claims. The Commissioner may institute and prosecute suits or actions in the name of the Commonwealth on behalf of claimants known and approved by the Commissioner in any appropriate court. The Commissioner may appeal a decision of any court that is contrary to any distribution recommended or authorized by him.

1976, c. 44, § 3.1-699.1; 1985, c. 354; 2008, c. 860.

§ 3.2-4718. Execution and terms of bond; action thereon.

The bond shall be executed by the applicant as principal and by a surety company qualified and authorized to do business in the Commonwealth as surety or by such personal surety as may be approved by the circuit court of the locality where the applicant resides or has his principal office. The bond shall be conditioned upon compliance with the provisions of this article and upon the faithful and honest handling of farm products in accordance with the terms of this article. The bond shall be to the Commonwealth in favor of every consignor of farm products. Any consignor of farm products claiming to be injured by the fraud, deceit or negligence of any commission merchant may bring action upon the bond against either the principal, or the surety, or both in an appropriate court to recover the damages caused by such fraud, deceit or negligence, or the failure to comply with the provisions of this article, or to make prompt and accurate settlement with the consignor.

Code 1950, § 3-542; 1966, c. 702, § 3.1-700; 2008, c. 860.

§ 3.2-4719. Duties and powers of Commissioner with respect to bonds.

The Commissioner may accept the proceeds from any bond and deposit the proceeds in the state treasury at interest in favor of the bond claimants. The Commissioner may institute and prosecute suits or actions in the name of the Commonwealth on behalf of claimants approved by him in any appropriate court for any purpose in connection with the collection or distribution of the bond or its proceeds. It shall be the duty of any person having a claim against a commission merchant to notify the Commissioner of his claim. The Commissioner shall have no duty to prosecute any claim unless he has received such notice and believes the claim is valid. If the Commissioner believes the claim to be invalid, he shall notify the claimant. The claimant shall then have his remedy pursuant to § 3.2-4718. The Commissioner may appeal a decision of any court that is contrary to any distribution recommended or authorized by him.

1985, c. 354, § 3.1-700.1; 2008, c. 860.

§ 3.2-4720. Schedule of commissions and charges to be filed.

The applicant shall file with the Commissioner at the time of furnishing the bond a schedule of his maximum commissions and charges for service in connection with the produce handled on account of or as agent for the parties. Such commissions and charges shall not be changed for one year thereafter, except by a written contract between the commission merchant and the consignors of farm products. A person operating a livestock auction market or stockyard that has been posted by the U.S. Department of Agriculture and is being operated pursuant to the provisions of the Packers and Stockyards Act of 1921 (42 Stat. 159), as amended, may change his schedule of maximum commissions and charges if such changes are filed with the U.S. Department of Agriculture and are approved. These changes shall be posted with the Commissioner.

Code 1950, § 3-543; 1966, c. 702, § 3.1-701; 1968, c. 306; 2008, c. 860.

§ 3.2-4721. Investigation of transactions by Commissioner.

The Commissioner, upon the verified complaint of any interested party shall, or upon his own motion may, investigate:

1. Any transaction involving solicitation, receipt, sale, or attempted sale of farm products by any person acting or attempting to act as a commission merchant;

2. The failure of any commission merchant to make proper and true account of sales and settlement as required in this article;

3. Any transaction in which produce consigned to a commission merchant is disposed of to a person composed substantially of the same persons as stockholders, members, or others, who compose the commission merchant;

4. The intentional making of false statements by a commission merchant as to condition, grade, or quality of any farm products received or in storage;

5. The intentional making of false statements by a commission merchant as to market condition;

6. The failure of any commission merchant to make payment for farm products within the time required by this article; or

7. Any other injurious transaction arising out of the sale of farm produce on commission.

Code 1950, § 3-544; 1966, c. 702, § 3.1-702; 2008, c. 860.

§ 3.2-4722. Complaint to Commissioner by consignor; Commissioner's action.

A. When a consignor of farm products to a commission merchant files a complaint with the commission merchant within 90 days after date of sale, and has failed to obtain a satisfactory settlement of the complaint within 10 days after the filing of the complaint, a complaint setting forth the facts may be filed with the Commissioner, who shall undertake a settlement of the matter.

B. If the Commissioner is unable to settle the matter to the satisfaction of the parties involved, within a reasonable time, he shall, after giving the parties at least five days' notice as to time and place, proceed to hear evidence concerning the matter. The hearing shall occur in the city or town where the business of the commission merchant is located or where the transaction complained of occurred, or at the option of the parties, in such other place as they may mutually agree. The Commissioner shall either dismiss the complaint or enter an order against the commission merchant to afford the consignor relief. Any such order shall be complied with within the time specified by the Commissioner but shall not be less than five days.

Code 1950, §§ 3-545, 3-546; 1966, c. 702, §§ 3.1-703, 3.1-704; 1976, c. 164; 2008, c. 860.

§ 3.2-4723. Right of entry; administration of oaths; testimony.

The Commissioner may:

1. Conduct investigations relative to the complaint or matter being investigated, and he shall have at all times unimpeded access to all buildings, yards, warehouses, storage and transportation facilities in which any farm products are kept, stored, handled, or transported;

2. Administer oaths and take testimony, and issue subpoenas requiring the attendance of witnesses before him, together with all books, memoranda, papers, and other documents, articles or instruments; and

3. Compel the disclosure by witnesses of all facts known to them relative to the matters under investigation.

Code 1950, §§ 3-547, 3-548; 1966, c. 702, §§ 3.1-705, 3.1-706; 2008, c. 860.

§ 3.2-4724. Grounds for refusal or revocation of license.

The Commissioner may refuse to grant a license, delay the issuance of a license, or revoke any license when he finds that:

1. A money judgment that has been entered against a commission merchant has not been satisfied;

2. False, fraudulent, or improper charges or returns have been made by the licensee for the handling, sale, or storage of farm products, or for the rendering of any related service;

3. The licensee has failed to render a true account of sales, or to settle promptly and within the time and in the manner required by this article;

4. The licensee has made false or misleading statements as to the grade, condition, quality or quantity of farm products received, handled, stored or held by him for sale on commission;

5. The licensee has made false or misleading statements as to market conditions;

6. There has been a combination to fix prices;

7. The licensee has, directly or indirectly, purchased for his or its own account farm products received by him or it, upon consignment, without prior authority from consignor in writing and at a fixed price agreed to by the consignor. This subdivision shall not apply to operators of livestock auction markets who are prohibited from purchasing consigned livestock under the federal Packers and Stockyards Act of 1921 (42 Stat. 159), as amended;

8. The licensee has made fictitious sales or has been guilty of collusion to defraud the consignor;

9. The licensee has reconsigned the farm products to another person without first obtaining the written consent of the consignor or written notice has not been given by the licensee to consignor that all or a part of the shipment was reconsigned;

10. The licensee sells farm products consigned to him or it, to another person owned or controlled by the licensee, or in which the licensee may have a financial or other interest, either directly or indirectly, and no notice has been given, in writing, to the consignor by the licensee that all or a part of such shipment was sold to a person in which the licensee has a financial or other interest;

11. The licensee was intentionally guilty of fraud or deception in the procurement of the license;

12. The licensee has failed to file with the Commissioner a schedule of his maximum commissions and other charges for services for the produce handled on account of or as agent of another as prescribed in this article, prior to the first day of February of each year;

13. The licensee has failed to obey and comply with any order of the Commissioner entered pursuant to the provisions of subsection B of § 3.2-4722 within the time specified in such order, or in the case of an appeal within 10 days of the time the Commissioner's order became final;

14. The licensee has failed to comply with any assurance the Commissioner has required pursuant to subsections C and D of § 3.2-4711; or

15. The licensee, his agents, contractors, or employees are guilty of violating any provision of this section.

Code 1950, § 3-551; 1966, c. 702, § 3.1-709; 1979, c. 389; 2008, c. 860.

§ 3.2-4725. Publication of revocation.

When a license is revoked, a notice of the revocation and the reason for the revocation shall be published once a week for two successive weeks in one or more daily papers selected by the Commissioner and the Department shall post notice of the revocation on its website for a period of two weeks from the date of the revocation.

Code 1950, § 3-552; 1966, c. 702, § 3.1-710; 2008, c. 860.

§ 3.2-4726. Failure to comply with orders of Commissioner constitutes contempt.

All parties disobeying the orders or subpoenas of the Commissioner are guilty of contempt and shall be certified to an appropriate court for punishment.

Code 1950, § 3-549; 1966, c. 702, § 3.1-707; 2008, c. 860.

§ 3.2-4727. Copies of papers in Commissioner's office as prima facie evidence.

Copies of all records, inspection certificates, certified reports and all papers on file in the office of the Commissioner shall be prima facie evidence of the matter contained.

Code 1950, § 3-550; 1966, c. 702, § 3.1-708; 2008, c. 860.

§ 3.2-4728. Appeal from orders and actions of Commissioner.

Any action of the Commissioner: (i) entering any order pursuant to subsection B of § 3.2-4722; (ii) refusing to grant a license; (iii) revoking a license already granted to a commission merchant; or (iv) refusing to renew a license, shall be subject to the right of appeal in accordance with the provisions of the Administrative Process Act (§ 2.2-4000 et seq.).

Code 1950, § 3-554; 1966, c. 702, § 3.1-712; 1976, c. 164; 1986, c. 615; 2008, c. 860.

§ 3.2-4729. Records to be kept by commission merchant.

Every commission merchant, having received any farm products for sale on commission, shall promptly maintain a complete and true record, showing in detail the following with reference to the handling, sale, or storage of such farm products:

1. The name and address of the consignor;

2. The date received;

3. The condition, grade, and quantity on arrival;

4. The date of such sale for the account of the consignor;

5. The sale price;

6. An itemized statement of the charges to be paid by the consignor in connection with the sale;

7. A lot number or other identifying mark that shall appear on all sales tags or tickets or on any other essential records needed to show the sale price of the products; and

8. Records of auction sales of farm produce or farm products, including sales tags, tickets, or bills, which shall be sequentially numbered and each such sequentially numbered record shall be properly accounted for in the operations of the commission merchant. Any record that is altered shall bear the full signature of the person authorized to make, and who is responsible for, the alteration.

Code 1950, § 3-555; 1966, c. 702, § 3.1-713; 1979, c. 389; 2008, c. 860.

§ 3.2-4730. Detailed statements shall be kept of claims for overcharges or damages filed by commission merchant for consignor.

A detailed statement shall be kept of the filing of any claim that has or may be filed by the commission merchant against any person for overcharges or for damages resulting from the injury or deterioration of farm products by the act, neglect, or failure of such person. Such records shall be open for inspection by the Commissioner and the consignor of farm products for whom such claim is made. The money returns, if any, collections, or damages received by the commission merchant for and on behalf of consignor of farm products by reason of the overcharges, damages or deterioration shall immediately be paid to the consignor of farm products less charges for collection, in accordance with the schedule of charges filed under § 3.2-4720.

Code 1950, § 3-556; 1966, c. 702, § 3.1-714; 2008, c. 860.

§ 3.2-4731. Record and account, together with remittance for each sale, to be delivered to consignor.

A copy of the record and account of sales of farm products, together with remittances in full of the amount realized by such sales, less the agreed upon commissions and other charges, shall be delivered to the consignor upon the completion of the sale. All moneys received by the commission merchant in payment for any consignment of farm products, less the agreed upon commission and other charges, shall be paid to the consignor within 10 days after receipt of the moneys by the commission merchant, unless otherwise agreed in writing. The names and addresses of purchasers need not be given unless demanded in cases of complaint.

Code 1950, § 3-557; 1966, c. 702, § 3.1-715; 2008, c. 860.

§ 3.2-4732. Copies of records to be kept by commission merchant.

Every commission merchant shall retain a copy of all records, including sales tags or tickets, account of sales, or other records covering each transaction for a period of three years from the date of the transaction. The copy shall at all times be available for, and open to, confidential inspection by the Commissioner, and the interested consignor or his authorized representative.

Code 1950, § 3-558; 1966, c. 702, § 3.1-716; 1968, c. 306; 1979, c. 389; 2008, c. 860.

§ 3.2-4733. Certificate establishing condition, quality, and grade to be furnished by Commissioner in event of dispute.

If there is a dispute or disagreement between a consignor and a commission merchant arising at the time of delivery as to condition, quality, grade, pack, quantity or weight of any lot, shipment or consignment of farm products, the Commissioner shall furnish, upon the payment by the requesting party of the necessary expenses, a certificate establishing the condition, quality, grade, pack, quantity or weight of such lot, shipment, or consignment. The certificate shall be prima facie evidence in all courts of the Commonwealth as findings at the time such inspection was made. The burden of proof shall be upon the commission merchant to prove the correctness of his accounting as to any transaction that may be questioned.

Code 1950, § 3-559; 1966, c. 702, § 3.1-717; 2008, c. 860.

§ 3.2-4734. Duty of attorney for the Commonwealth.

It shall be the duty of the attorney for the Commonwealth to prosecute all violations of this article.

Code 1950, § 3-561; 1966, c. 702, § 3.1-719; 2008, c. 860.

§ 3.2-4735. Venue.

Civil suits and criminal prosecutions arising by virtue of any provision of this article may be commenced and tried in: (i) the city or county where the products were received by the commission merchant; (ii) the city or county where the principal place of business of the commission merchant is located within the Commonwealth; or (iii) the city or county where the violation occurred.

Code 1950, § 3-562; 1966, c. 702, § 3.1-720; 2008, c. 860.

§ 3.2-4736. License required.

A. It is unlawful for any person to act as, operate, or carry on the business of a commission merchant without first obtaining a license.

B. Any person who violates this section is guilty of a Class 1 misdemeanor.

Code 1950, § 3-535; 1966, c. 702, § 3.1-693; 2008, c. 860.

§ 3.2-4737. Offenses and punishment.

Any person who commits any of the following acts is guilty of a Class 1 misdemeanor:

1. Imposes false charges for handling or for services in connection with farm products;

2. Fails to account promptly, correctly, fully and properly and to make settlement as provided in this article;

3. Makes false and misleading statements as to market conditions with the intent to deceive;

4. Makes fictitious sales or collusion to defraud the consignor, or enters into any combination to fix prices;

5. Directly or indirectly purchases for his or its own account, farm products, received by him or it on consignment without prior authority from the consignor in writing. This subsection shall not apply to the operators of livestock auction markets who are prohibited from purchasing consigned livestock under the federal Packers and Stockyards Act of 1921 (42 Stat. 159), as amended;

6. Intentionally makes false statements as to grade, condition, markings, quality, or quantity of farm products shipped or packed;

7. Reconsigns farm products as have been consigned to him to another person, unless consent of the consignor has been first obtained in writing, or notice given in writing to the consignor by the licensee that all or a part of such shipment was reconsigned;

8. Sells farm products consigned to him to another person owned or controlled by him, or in which the licensee may have a financial or other interest, either directly or indirectly, unless notice is given, in writing, to the consignor by the commission merchant that all or a part of such shipment was sold to a person in which the licensee has a financial or other interest;

9. Fraudulently or deceptively obtains a license;

10. Fails or neglects to give written notice immediately to the Commissioner and the surety on the bond of the commission merchant, of any changes or alterations in the style, name or personnel of the person to whom such license has been issued; or

11. Fails to comply with the provisions of this article.

Code 1950, § 3-560; 1966, c. 702, § 3.1-718; 1979, c. 389; 2008, c. 860.

Article 3. Dealers in Agricultural Produce.

§ 3.2-4738. Definitions.

As used in this article, unless the context requires a different meaning:

"Agricultural produce" means fruits and vegetables.

"Bond" means a bond executed by a surety company licensed to do business in the Commonwealth.

"Buying brokerage transaction" means a transaction in which the dealer acts as agent for the grower in the purchase of agricultural produce at the day's price for the agricultural produce purchased in the transaction.

"Cash buyer" means any person who obtains from the producer, or his representative, title, possession or control of any agricultural produce or contracts for the title, possession or control of any agricultural produce, and who buys any agricultural produce by paying to the producer at the time of obtaining possession or control, or at the time of contracting for the title, possession or control of any agricultural produce, the agreed price of such agricultural produce in coin or currency, certified checks, cashier's checks or drafts issued by a bank.

"Consignment" means any transfer of agricultural produce by the seller to the custody of another person who acts as the agent for the seller for the purpose of selling such agricultural produce.

"Day's price" means the market price of any agricultural produce on a given day as determined by the U.S. Department of Agriculture and published by the Division.

"Dealer" means any person who buys, sells, solicits for sale, processes for sale or resale, resells, exchanges, negotiates, purchases or contracts for processing or transfers any agricultural produce of a producer. The term shall exclude: (i) any person operating solely on a commission basis in Virginia as a licensed commission merchant under the provisions of Article 2 of this chapter; (ii) farmers or groups of farmers selling agricultural produce grown by them; (iii) any person who operates strictly as a cash buyer; (iv) any processor who processes agricultural produce within Virginia; and (v) any person who buys agricultural produce for wholesale or retail in Virginia.

"Grower's agent transaction" means a transaction or series of transactions in which the dealer agrees to sell the entire crop produced by one grower during one season, at a price to be agreed upon between the dealer and the grower.

"Joint account transactions" means a transaction between a dealer and grower in which the dealer pays the grower based on the price for which the agricultural produce sells in relation to the price agreed upon between the dealer and grower.

"Processor" means any person operating any plant in the Commonwealth that freezes, dehydrates, cans, or otherwise changes the physical form or characteristics of agricultural produce.

"Producer" means any person who produces agricultural produce in Virginia.

1968, c. 598, § 3.1-722.1; 1970, c. 400; 1972, c. 646; 1994, c. 340. 2008, c. 860.

§ 3.2-4739. License required; application for license and license fee; license renewals; list of dealers.

A. Every dealer shall obtain a license to operate and conduct business.

B. Such persons shall on or before May 1 of each year file a written application for a license with the Commissioner for the licensing year of May 1 to April 30. Each dealer shall pay a license fee of $50 per licensing year. Each license shall expire on April 30 of the licensing year for which the license was issued. The license shall be valid through May 31 of the next licensing year or until issuance of the renewal license, whichever occurs first, if the holder shall have filed a renewal application and a new bond or a continuation certificate continuing his current bond with the Commissioner on or before April 30 of the licensing year for which the Commissioner issued the license Any dealer proposing to transact business within the Commonwealth who fails to file such written application for a license and pay the licensing fee on or before May 1 shall pay a $50 late fee in addition to the license fee. Any person who engages in business as a dealer before obtaining a license shall be subject to a $250 penalty, in addition to the license fee and the late fee.

C. The application for a license shall be on a form furnished or approved by the Commissioner and shall contain the following information along with such other information as the Commissioner shall require on the form:

1. The name and address of the applicant and that of its local agent, if any, and the location of its principal place of business within the Commonwealth;

2. The kinds of agricultural produce the applicant proposes to handle; and

3. The type of produce business proposed to be conducted.

D. Each licensee shall renew his licenses on or before May 1 of each year for the licensing year May 1 to April 30. The licensee shall make application to the Commissioner on a form furnished or approved by the Commissioner and the licensee is subject to the provisions of subsection B.

E. The Commissioner may publish a list of dealers licensed under this article.

1968, c. 598, §§ 3.1-722.2, 3.1-722.3; 1994, c. 340, § 3.1-722.6:1; 2008, c. 860.

§ 3.2-4740. Bond required.

Each application shall be accompanied by a good and sufficient bond in the minimum sum of $1,000 or in such greater amount as is equal to the maximum amount of gross business the applicant does in any month in the Commonwealth during the preceding licensing year, but in no event shall the amount of bond required exceed $40,000.

1968, c. 598, § 3.1-722.4; 1972, c. 646; 1977, c. 21; 1994, c. 340; 2008, c. 860.

§ 3.2-4741. Execution, terms and form of bond; action on bond.

A. The bond shall be executed by the applicant as principal and by a surety company authorized and qualified to do business in the Commonwealth as surety. The applicant shall file on or before May 1 of each licensing year a copy of the bond with the Commissioner and the Commissioner shall be designated as the trustee of this bond. If the bond is not filed by the due date, and if the applicant notifies the Commissioner that the bond application is in process and furnishes the Commissioner a copy of the dated bond application, the Commissioner may grant a grace period of 15 working days for the applicant to file the bond without penalty. Any applicant who fails to file a bond by the 15th day of the grace period, shall be subject to all applicable late fees and penalties as stated in §§ 3.2-4739 and 3.2-4751 before a license will be issued.

B. The bond shall be upon a form prescribed or approved by the Commissioner and shall be conditioned to secure the faithful accounting for payment to producers, agents or representatives, of all agricultural produce purchased, handled or sold by the dealer. Any producer claiming to be injured by the nonpayment, fraud, deceit or negligence of any dealer may bring action upon the bond against the principal, or the surety, or both in an appropriate court.

1968, c. 598, § 3.1-722.5; 1994, c. 340; 2008, c. 860.

§ 3.2-4742. Duties and powers of Commissioner with respect to bonds.

The Commissioner may accept the proceeds from any bond on which he is trustee and deposit the proceeds in the state treasury with interest in favor of the bond claimants. The Commissioner may institute and prosecute suits for actions in the name of the Commonwealth on behalf of the claimants known and approved by him in any appropriate court for any purpose in connection with the collection or distribution of the bond or its proceeds. It shall be the duty of any person having a claim against a produce dealer to notify the Commissioner of his claim. The Commissioner shall have no duty to prosecute any claim unless he has received notice and believes the claim is valid. If the Commissioner believes the claim is invalid, he shall notify the claimant. The claimant shall then have his remedy pursuant to § 3.2-4741. The Commissioner may appeal a decision of any court that is contrary to any distribution recommended or authorized by him.

1985, c. 354, § 3.1-722.5:1; 2008, c. 860.

§ 3.2-4743. Agricultural Dealers Fund established; disposition of funds.

There is hereby created in the state treasury a special nonreverting fund to be known as the Agricultural Dealers Fund, hereafter referred to as "the Fund." The Fund shall be established on the books of the Comptroller. All moneys received by the Commissioner for license fees, license renewals, late fees, and penalties shall be paid into the state treasury and credited to the Fund. Interest earned on moneys in the Fund shall remain in the Fund and be credited to it. Any moneys remaining in the Fund, including interest thereon, at the end of each fiscal year shall not revert to the general fund but shall remain in the Fund. The Fund shall be used for the enforcement and administration of this article. Disbursements from the Fund shall be made by the State Comptroller at the written request of the Commissioner.

1968, c. 598, § 3.1-722.7; 1994, c. 340; 2008, c. 860.

§ 3.2-4744. Records to be kept by dealers.

Every dealer that has received any agricultural produce from a producer shall keep a complete and true record and retain it for three years, showing in detail the following with reference to the handling or sale of such agricultural produce, along with any other information as the Commissioner may require as outlined in the record inspection form:

1. The name and address of the producer;

2. The date received;

3. The condition, grade (if officially graded), and quantity on receipt;

4. The date of resale or transfer of the produce to another; and

5. The sale price.

1968, c. 598, § 3.1-722.8; 1994, c. 340; 2008, c. 860.

§ 3.2-4745. Copies of contracts to be filed with Commissioner.

Copies of any contract between any producer and dealer or between any dealer and buyer made in advance of the harvesting season to supply agricultural produce shall be filed with the Commissioner within 10 days of the signing of such contract.

1972, c. 646, § 3.1-722.14; 2008, c. 860.

§ 3.2-4746. Commissioner's authority to inspect.

A. Upon the complaint of any person, the Commissioner may inspect the books and records of any licensed dealer at any time during operating hours and shall have free access to the place where the business is operated.

B. Upon the complaint of any person or upon his own initiative, the Commissioner may inspect the books and records of any person, other than a licensed dealer, who solicits, or attempts to solicit, receipt, sale, or transfer of agricultural produce. The Commissioner shall conduct such inspections at any time during operating hours. The Commissioner t shall have the right of access to the place where the person's business is operated, or the place where his books and records are kept.

1968, c. 598, § 3.1-722.9; 1970, c. 400; 1972, c. 646; 1994, c. 340; 2008, c. 860.

§ 3.2-4747. Refusal or revocation of license.

A. The Commissioner may refuse to grant a license, delay the issuance of a license, or revoke or suspend any license already granted when he finds that the dealer:

1. Has not satisfied a money judgment entered against him;

2. Has failed to promptly and properly account or to promptly and properly pay for agricultural produce;

3. Has made a false or misleading statement as to market conditions or the service rendered;

4. Has perpetrated a fraud or engaged in deceit in procuring the license;

5. Has engaged in any fraudulent or deceitful practices in his dealings with producers; or

6. Has failed to comply with any provisions of this article or any regulations adopted by the Board.

B. For the purposes of this section the terms:

"Promptly and properly account," except when otherwise specifically agreed upon in writing by the parties, means providing a complete and true accounting: (i) in connection with buying brokerage transactions, within 24 hours after the date of delivery of the agricultural produce to their first destination; (ii) in connection with consignment or joint account transactions, within 10 days after the date of final sale of each shipment. However, if a grower's agent, while conducting a grower's agent transaction, or a shipper distributes individual lots of produce for or on behalf of others, his accounting shall be made within five days after the date he is paid by the purchaser or receives the accounting on consigned or joint account transactions. If a grower's agent, while conducting a grower's agent transaction, or shipper harvests, packs, or distributes entire crops or multiple lots therefrom for or on behalf of others, he shall make accountings within seven days following shipment by the dealer; and (iii) in connection with a consignment or joint account transaction, within 10 days after the date of receipt of payment of a carrier claim filed. Nothing in this section shall prohibit cooperative associations from accounting to their members on the basis of seasonal pools or other arrangements provided by their regulations or bylaws.

"Promptly and properly pay" means payment within 30 days of the receipt of the produce by the dealer, unless a written agreement signed by both parties expressly provides or permits otherwise. In the case of joint transactions, if the produce sells at or for less than the agreed price, the dealer pays the agreed price to the grower. If the produce sells for more than the agreed price, the dealer shall pay to the grower one-half of the difference between the sale price and the agreed price.

1968, c. 598, § 3.1-722.10; 1972, c. 646; 1980, c. 277; 1994, c. 340; 2008, c. 860.

§ 3.2-4748. Hearing before the Commissioner.

Before the Commissioner refuses or revokes a license, the applicant or licensee shall have the right to review in accordance with the provisions of the Administrative Process Act (§ 2.2-4000 et seq.).

1970, c. 400, § 3.1-722.12; 1994, c. 340; 2008, c. 860.

§ 3.2-4749. Commissioner may enjoin; Attorney General may prosecute.

The Commissioner may bring an action to enjoin the violation or threatened violation of any provision of this article, or any regulation adopted hereunder, in the circuit court of the city or county where the violation occurs or is about to occur. If the violation affects more than one locality, the action may be brought in the Circuit Court of the City of Richmond. The Commissioner may request either the attorney for the Commonwealth or the Attorney General to bring action under this section. The Attorney General is authorized to prosecute any violation of this article.

1968, c. 598, § 3.1-722.11; 1994, c. 340; 2008, c. 860.

§ 3.2-4750. Operating without a license.

It is unlawful for any dealer to operate and conduct a business without first having obtained a license.

1968, c. 598, § 3.1-722.2; 1994, c. 340; 2008, c. 860.

§ 3.2-4751. Penalty for violation of article.

Any person who intentionally violates any provision of this article or regulations promulgated hereunder is guilty of a Class 1 misdemeanor.

1968, c. 598, § 3.1-722.11; 1994, c. 340; 2008, c. 860.

§ 3.2-4752. Reciprocal agreements with other states and federal government.

The Commissioner may enter into reciprocal agreements with appropriate officials of other states or of the federal government for the purpose of exchanging any information of violations of this article or laws of other states or the federal government that have similar purposes as this article.

1972, c. 646, § 3.1-722.15; 2008, c. 860.

Article 4. Dealers in Grain Products.

§ 3.2-4753. Definitions.

As used in this article, unless the context requires a different meaning:

"Cash buyer" means any person who pays the producer, or his representative, at the time of obtaining title, possession or control of grain, the agreed price of such grain in coin or currency, certified checks, cashier's checks, or drafts issued by a bank.

"Contract" means a binding agreement between the grain dealer and the producer that describes the terms and conditions of the delivery of grain and the purchase price.

"Deferred payment" means that the purchase price for grain delivered by the producer is fixed and specified in the contract, but payment is not received by the producer until a mutually agreed upon subsequent date.

"Full market value" means the value recognized as the average weekly price per bushel for the Commonwealth as quoted by the Department.

"Grain" means grains including corn (maize), wheat, rye, oats, barley, flaxseed, soybeans, and sunflower.

"Grain bank" means grain owned by a producer and held temporarily by the dealer for use in the formulation of feed and returned to the producer on demand as feed or whole grain.

"Grain dealer" means any person who buys, solicits for sale or resale, processes for sale or resale, contracts for storage or exchange, or transfers grain of a Virginia producer. The term shall exclude farmers or groups of farmers buying grain for consumption on their farms.

"Grain exchange" means grain owned by a producer and held temporarily by the dealer for use in the formulation of processed flour to be returned to the producer on demand as flour or whole grain.

"Loss" means any monetary loss to a producer as a result of doing business with a dealer that shall include bankruptcy, embezzlement, theft or fraud.

"Price later" means that the actual purchase price is not fixed at the time of delivery, but allows the producer to choose a bid price on any business day during a stated time period as agreed between the parties.

"Producer" means any person in Virginia who produces grain.

"Storage" or "holding" means any method by which grain owned by another is held for the owner by a person who is not the direct owner, except for transportation thereof.

1972, c. 296, § 3.1-722.16; 1982, c. 187; 2008, c. 860.

§ 3.2-4754. License required; application for license or renewal.

A. No person shall act as a grain dealer without first having obtained a license.

B. Every grain dealer proposing to transact business within the Commonwealth shall annually on or before January 1, file a written application for a license or for the renewal of a license with the Commissioner. The application shall be on a form furnished by the Commissioner and shall contain the following information and such other relevant information as the Commissioner shall require:

1. The name and address of the applicant and that of its local agent or agents, if any, and the location of its principal place of business within the Commonwealth;

2. The kinds of grain the applicant proposes to handle; and

3. The type of grain business proposed to be conducted.

1972, c. 296, §§ 3.1-722.17, 3.1-722.18; 2008, c. 860.

§ 3.2-4755. License and renewal fee; bond or irrevocable letter of credit required; exemption.

A. All applications a for license or license renewal shall be accompanied by a license fee of $40, $10 for each branch location and agent, and a good and sufficient bond in an amount of $2,000 or an amount equal to the maximum amount of gross business done in any month in the Commonwealth during the preceding year by the applicant, whichever is greater, but in no event shall the amount of bond required exceed $40,000. An irrevocable letter of credit for the full amount of required bond may be submitted in lieu of a surety bond. A person, who upon written request shows proof satisfactory to the Commissioner that he is a cash buyer, shall be exempted from the bonding or irrevocable letter of credit requirements. The exemption shall be granted within 20 days of the receipt of the exemption request, unless the Commissioner requests the dealer to provide additional necessary information or unless the request is denied.

B. Any licensed grain dealer who fails to apply and qualify for the renewal of a license on or before the date of expiration, shall pay a penalty of $25, which shall be added to the original license fee and shall be paid by the applicant before the renewal may be issued.

1972, c. 296, §§ 3.1-722.19, 3.1-722.21; 1982, c. 187; 2008, c. 860.

§ 3.2-4756. Execution, terms and form of bond or irrevocable letter of credit; action on bond or irrevocable letter of credit; investigation of complaints.

The bond shall be executed by the applicant as principal and by a surety company authorized and qualified to do business in the Commonwealth as surety. An irrevocable letter of credit may be issued on such terms as the Commissioner may require. The Commissioner shall be designated as the trustee of the bond or beneficiary of the irrevocable letter of credit, and a copy of the bond or irrevocable letter of credit shall be filed with him. The bond shall be in a form prescribed or approved by the Commissioner and shall be conditioned to secure the faithful accounting for payment to producers, agents or representatives, of all grain purchased, stored, handled or sold by the dealer. Any producer claiming to be injured by the nonpayment, fraud, deceit or negligence of any dealer may bring action upon the bond against the principal, or the surety, or both in an appropriate court. In the event the Commissioner receives written complaint from an injured producer of nonpayment, fraud, deceit or negligence of a dealer, the Commissioner may investigate such complaint and make recommendations to the surety company as to the culpability of the dealer, if any.

1972, c. 296, § 3.1-722.20; 1982, c. 187; 2008, c. 860.

§ 3.2-4757. Duties and powers of Commissioner with respect to bonds.

The Commissioner may accept the proceeds from any bond on which he is trustee or any letter of credit on which he is beneficiary, and deposit the proceeds in the state treasury at interest in favor of the claimants. The Commissioner may institute and prosecute suits or action in the name of the Commonwealth on behalf of claimants known and approved by him in any appropriate court for any purpose in connection with the collection or distribution of the proceeds. It shall be the duty of any person having a claim against a grain dealer to notify the Commissioner of his claim. The Commissioner shall have no duty to prosecute any claim unless he has received such notice and believes the claim is valid. If the Commissioner believes the claim to be invalid, he shall notify the claimant. The claimant shall then have his remedy pursuant to § 3.2-4756. The Commissioner may appeal a decision of any court that is contrary to any distribution recommended or authorized by him.

1982, c. 187, § 3.1-722.20:1; 1985, c. 354; 2008, c. 860.

§ 3.2-4758. Grain Dealers Licensing and Bonding Fund established; disposition of fees and penalties.

There is hereby created in the state treasury a special nonreverting fund to be known as the Grain Dealers Licensing and Bonding Fund, hereafter referred to as "the Fund." The Fund shall be established on the books of the Comptroller. All fees and penalties for renewals payable under this article shall be collected by the Commissioner and paid into the state treasury and credited to the Fund. Interest earned on moneys in the Fund shall remain in the Fund and be credited to it. Any moneys remaining in the Fund, including interest thereon, at the end of each fiscal year shall not revert to the general fund but shall remain in the Fund. Moneys in the Fund shall be used for the sole purpose of enforcement of this article.

1972, c. 296, § 3.1-722.22; 1975, c. 531; 1982, c. 187; 2008, c. 860.

§ 3.2-4759. Records to be kept by dealers.

A. Every grain dealer in the Commonwealth shall keep such records of grain transactions for such reasonable periods of time and in accordance with good business practices as may be required by the Board.

B. Written agreements, in addition to such other information as may be required, shall contain the following:

1. The seller's name and address;

2. The conditions of delivery;

3. The amount and kind of grain delivered;

4. The price per bushel or basis of value; and

5. The date payment is to be made.

1972, c. 296, § 3.1-722.23; 1982, c. 187; 2008, c. 860.

§ 3.2-4760. Grounds for refusal or revocation of license.

The Commissioner may refuse to grant or renew any license, or revoke any license if he finds that the grain dealer:

1. Has not satisfied a final money judgment entered against him;

2. Has failed to promptly and properly account and pay for in full within 10 calendar days of the receipt of the grain from the producer, unless a written agreement signed by both parties expressly provides or permits otherwise. The prompt and proper accounting of and payment for grain shall include the following:

a. Any grain dealer who purchases grain from a producer shall deliver to the producer or his duly authorized representative the full amount of the purchase price, within the time specified in this subdivision. Payment shall occur either by transferring a check in the full amount to the producer or his authorized agent at the point of transfer of possession, wiring transfer funds to the producer's account for the full purchase price, or by depositing a check in the United States mail for the full amount properly addressed to the producer and in an envelope postmarked within the time specified in this section.

b. Any grain dealer who sells grain deposited in his grain storage facility by a producer shall promptly notify the producer or his duly authorized representative of the sale, and shall deliver to the producer or his authorized representative the full amount of the purchase price within the time specified in this subdivision. The time limit may be extended for good cause and with the written consent of the depositor. Nonpayment by the purchaser shall not constitute "good cause" under this section.

c. Any grain dealer who enters into a deferred payment, price later, or contract transaction with a producer shall have the transaction in writing and signed by both parties and shall deliver a copy of the transaction to the producer or his duly authorized representative. Upon conclusion of the written agreement transaction, the dealer shall deliver to the producer or his authorized representative the full amount of the purchase price within the time specified in this subdivision;

3. Has failed to maintain business records of his grain transactions as required;

4. Has failed to post current discounts where they can readily be reviewed by the producer or his representative;

5. Upon the request of the producer or his representative, has failed to notify the producer or his representative at the time of delivery of all discounts and deductions applied;

6. Has failed to file annually with the Commissioner the discount schedules for each grain purchased, including the effective date of the purchase, or has failed to make available upon request of the Commissioner during normal business hours any changes in the discount schedules that have been filed;

7. Has engaged in fraudulent or deceptive practices in the transaction of his business as a dealer;

8. Has failed to state on producers receipts the type of grain transactions that shall include storage, grain bank, grain exchange, price later, deferred payment, and contract;

9. Has failed to maintain a bond or letter of credit as required; or

10. Has violated any regulation adopted by the Board.

1972, c. 296, § 3.1-722.24; 1975, c. 85; 1982, c. 187; 2008, c. 860.

§ 3.2-4761. Procedure for refusal or revocation of license; notice of hearing.

Before the Commissioner refuses or revokes a license, he shall give 10 days' notice by registered mail to the applicant or licensee of the time and place of hearing. The applicant or licensee may appear at the hearing in person, or with counsel and produce witnesses. If the Commissioner finds the applicant or licensee in violation of any act provided in § 3.2-4760, he may refuse, suspend, or revoke the license and shall give immediate notice of his action to the applicant or licensee.

1972, c. 296, § 3.1-722.25; 2008, c. 860.

§ 3.2-4762. Commissioner's authority to investigate.

The Commissioner may conduct investigations relative to the complaint or matter being investigated, and he shall have free and unimpeded access during normal business hours to all buildings, yards, warehouses, storage and transportation facilities in which grain is kept, stored, handled, or transported, or where records of grain transactions are kept.

1972, c. 296, § 3.1-722.26; 2008, c. 860.

§ 3.2-4763. Violation a misdemeanor; illegal acts relating to issuance of receipts or removal of grain under storage, exchange or grain bank a felony.

A. Any person who violates any of the provisions of this article or the regulations adopted by the Board is guilty of a Class 1 misdemeanor.

B. Any grain dealer or employee or manager for a grain dealer who: (i) issues any storage, grain exchange or grain banking receipts for any grains that are not in a storage facility at the time of issuing such receipt; (ii) issues any grain receipt, including a scale ticket, that is in any respect fraudulent in its character, either as to its date or to the quantity, quality or inspected grade of such grain; or (iii) removes any grain from a storage facility, except to preserve the grain from fire or other damage or to move from storage to another facility operated by the grain dealer and licensed by the grain dealer, without the permission of the producer or his agent is guilty of a Class 6 felony.

1972, c. 296, § 3.1-722.28; 1982, c. 187; 2008, c. 860.

Article 5. Cotton Handlers.

§ 3.2-4764. Definitions.

As used in this article, unless the context requires a different meaning:

"Cotton gin" means a facility where cotton seed and cotton lint are produced from raw cotton.

"Cotton handler" means any person doing business as a cotton gin, cotton merchant, or cotton warehouse.

"Cotton merchant" means any person who buys cotton from a producer for the purpose of resale, or acts as a broker or agent for a producer in arranging the sale of cotton. The term does not include a person that buys cotton for his own use.

"Cotton warehouse" means any enclosure in which producer-owned cotton is stored or held for longer than 48 hours.

2000, c. 584, § 3.1-722.29; 2008, c. 860.

§ 3.2-4765. License required; application; license fee and bond.

A. No person shall do business as a cotton handler without first obtaining a license from the Commissioner.

B. Every person intending to do business as a cotton handler, shall make application to the Commissioner for a license on or before July 1 of each year on a form provided by the Commissioner. Any license granted by the Commissioner shall expire on June 30 following the date of issuance. The application shall specify:

1. An address where the applicant will receive correspondence by first-class mail;

2. Every address where the records of the cotton handler will be kept;

3. Every address, including street address, building number, and city or town:

a. In the case of a cotton gin, where the cotton will be ginned; or

b. In the case of a cotton warehouse, where the cotton will be warehoused;

4. The full name and first-class mail address, including the street, city or town, and state, of a person who is authorized to receive service of process on behalf of the cotton handler; and

5. The form of business organization that the cotton handler will assume. If the applicant will be doing business as a sole proprietorship, he shall disclose the full name of the sole proprietor and the name under which the sole proprietor will be doing business. If the applicant will be doing business as a partnership, he shall disclose the full name of each of the partners, the name of the partnership, and the name under which the partnership will be doing business. If the applicant will be doing business as a corporation, he shall disclose the full name of each of the officers of the corporation, the name of the corporation, and the name under which the corporation will be doing business. If the applicant will be doing business as a limited liability company or foreign limited liability company, he shall disclose the full name of the manager of the company, the name of the company, and the name under which the company will be doing business as a cotton handler. If the company has no manager, the applicant shall disclose the full names of the members of the company.

C. The applicant shall submit with the application a nonrefundable application fee of $50.

D. Every person submitting an application for a license as a cotton handler who will be doing business as a cotton gin or cotton merchant shall furnish at the time of application for a license a bond in the amount of $50,000 in accordance with § 3.2-4767. Nothing in this subsection shall require a person doing business as a cotton gin to be separately licensed or bonded as a cotton merchant.

E. Except as otherwise provided in subsection F, every person making application for a license as a cotton handler doing business as a cotton warehouse shall furnish, at the time of application for the license, proof of insurance with a company licensed to do business in the Commonwealth in an amount equal to the fair market value of the maximum amount of cotton that can be stored in the warehouse, and a bond in the amount of $500,000 in accordance with § 3.2-4767.

F. In lieu of satisfying the requirements of subsection E, a cotton handler doing business solely as a cotton warehouse may furnish proof of a valid license issued pursuant to the United States Warehouse Act (USWA) (7 U.S.C. § 241 et seq.). A cotton handler governed by this subsection shall notify the Commissioner of any change in the status of its USWA license within 24 hours after being notified by the U.S. Department of Agriculture.

2000, c. 584, §§ 3.1-722.30 to 3.1-722.32; 2008, c. 860.

§ 3.2-4766. Additional information to be reported by cotton gin each license year.

Prior to beginning ginning for the current license year, the cotton gin will provide to the Commissioner the last bale tag number used in the previous year and first bale tag number to be used in the current year.

2000, c. 584, § 3.1-722.33; 2008, c. 860.

§ 3.2-4767. Execution and terms of bond; action.

Bonds required by § 3.2-4765 shall be executed by the applicant as principal and by a surety company authorized and qualified to do business in the Commonwealth as surety. The applicant shall file on or before July 1 of each licensing year a copy of the bond with the Commissioner, and the Commissioner shall be designated as the trustee of this bond. The bond shall be conditioned upon compliance with the provisions of this article and upon prompt and accurate settlement with the consignor. Any consignor of cotton claiming that a cotton handler has failed to comply with the provisions of this article or any regulations adopted hereunder, or has failed to settle promptly and accurately with the consignor, may bring action upon the cotton handler's bond against either the principal, or the surety, or both, in an appropriate court.

2000, c. 584, § 3.1-722.35; 2008, c. 860.

§ 3.2-4768. Duties and powers of Commissioner with respect to bonds.

The Commissioner may accept the proceeds from any bond on which he is trustee and deposit the proceeds in the state treasury with interest in favor of the bond claimants. The Commissioner may institute and prosecute suits for actions in the name of the Commonwealth on behalf of the claimants known and approved by him in any appropriate court for any purpose in connection with the collection or distribution of the bond or its proceeds. It shall be the duty of any person having a claim against a cotton handler to notify the Commissioner of his claim. The Commissioner shall have no duty to prosecute any claim unless he has received notice and believes the claim is valid. If the Commissioner believes the claim is invalid, he shall notify the claimant. The Commissioner may appeal a decision of any court that is contrary to any distribution recommended or authorized by him.

2000, c. 584, § 3.1-722.36; 2008, c. 860.

§ 3.2-4769. Investigation by Commissioner; right of entry and inspection.

A. The Commissioner, upon receiving a complaint or upon his own motion, may investigate any violation of the provisions of this article. Such investigation may include:

1. The inspection of the books and records of any cotton handler;

2. The inspection of any cotton, including the weighing and reweighing of a representative sample of cotton bales stored at the cotton handler's premises; and

3. The inspection of any place where cotton or any related record is or has been kept, stored, transported, or otherwise handled. In conducting the inspection, the Commissioner may enter any premises, including any building, yard, warehouse, storage facility, or transportation facility, in which cotton or any related record is or has been kept, stored, transported, or otherwise handled. In exercising such right of entry, the Commissioner shall enter the premises during its hours of operation.

B. Any cotton handler who is the subject of an investigation by the Commissioner shall, upon request, assist the Commissioner in making any inspection.

2000, c. 584, § 3.1-722.37; 2008, c. 860.

§ 3.2-4770. Records to be kept by cotton handler.

A. Every cotton gin shall keep an accurate daily record of the cotton received from each consignor and ginned. The record shall contain:

1. The name and address of the consignor of the cotton;

2. The date that the cotton gin received the cotton;

3. The condition, quality, and quantity of the cotton on arrival at the cotton gin;

4. The gross weight of the vehicle containing the cotton, the tare weight for the vehicle used to transport the cotton, and the net weight of the cotton delivered to the cotton gin for final processing into bales of finished cotton;

5. A lot number or other identifying mark given to each consignment of cotton by the cotton gin that shall appear on all tags, tickets, or statements and on any other essential records needed to show what cotton was ginned by the cotton gin on behalf of the consignor;

6. The sequentially numbered tag or mark assigned to the cotton bale;

7. A report of the finished cotton including the weight, grade, quality and condition;

8. A report of credit given for seed obtained during ginning process. If the actual weight of the seed is not determined, the record shall indicate the factor used to calculate weight and the final calculation; and

9. An itemized statement of the charges to be paid to the cotton gin by the consignor in connection with ginning the cotton.

B. If, at any time, the cotton gin alters any record required by subsection A, the cotton gin shall create an addendum to the record indicating the nature of the alteration and the date the alteration was made and sign the addendum to the record with the full name of the person making the addendum.

C. Every cotton warehouse, receiving any cotton for storage, shall promptly maintain an accurate record, showing in detail the following information with reference to the handling and storage of the cotton:

1. A daily inventory record consisting of all cotton stored in the warehouse recorded by bale tag number;

2. The receiving record with transactions recorded by bale tag number; and

3. The transfer record with transactions recorded by bale tag number.

D. Every cotton merchant, having received any cotton for transfer, shall promptly maintain an accurate record, showing in detail the following information with reference to the handling and sales of the cotton:

1. The sales record with transactions recorded by bale tag number; and

2. The payable record with transactions recorded by bale tag number.

E. Every cotton handler shall retain all records, including tags or tickers, covering each transaction with each consignor, for a period of three years after the date that the record is required to be made.

2000, c. 584, § 3.1-722.38; 2008, c. 860.

§ 3.2-4771. Record and accounts to be provided to consignor.

A. Every cotton gin shall:

1. Within 48 hours after ginning the cotton, make available to the consignor the record required under § 3.2-4770; and

2. Unless the consignor agrees otherwise in writing, within 10 days after ginning cotton, deliver to the consignor a copy of such record and an account of all cotton ginned for the consignor.

B. Unless the consignor agrees otherwise in writing, every cotton handler shall, within 10 days after transferring or selling cotton on behalf of the consignor, deliver to the consignor a copy of the record required under § 3.2-4770 and an account of the consignor's cotton transferred or sold.

2000, c. 584, § 3.1-722.39; 2008, c. 860.

§ 3.2-4772. Certificate establishing condition, quality, grade to be furnished.

Every cotton gin shall, at the time of ginning, obtain a sample of each bale of ginned cotton for the purpose of determining condition, quality, and grade. Unless such sample is graded by the U.S. Department of Agriculture, the burden of proof shall be on the cotton gin to prove the accuracy of its accounting as to any transaction that may be questioned by the consignor or the Commissioner, relating to condition, quality or grade of ginned cotton.

2000, c. 584, § 3.1-722.40; 2008, c. 860.

§ 3.2-4773. Identification of finished bales of cotton.

Every cotton gin shall: (i) determine the weight of each bale of finished cotton immediately following the making of the bale; (ii) number sequentially all finished cotton bales; and (iii) affix to each bale a sequentially numbered tag for the purpose of identifying the individual bale of finished cotton. The tag shall also identify the origin module. The burden of proof shall be upon the cotton gin to prove the accuracy of its accounting.

2000, c. 584, § 3.1-722.41; 2008, c. 860.

§ 3.2-4774. Denial, suspension, or revocation of a license.

The Commissioner may deny, suspend, or revoke the license of any cotton handler if the cotton handler violates any provision of § 3.2-4772 or 3.2-4775. The Commissioner shall provide reasonable notice of an informal fact-finding conference pursuant to § 2.2-4019 to any cotton handler in connection with the denial, suspension, or revocation of the cotton handler's license.

2000, c. 584, § 3.1-722.42; 2008, c. 860.

§ 3.2-4775. Offenses and punishment.

Any cotton handler is guilty of a Class 1 misdemeanor if he:

1. Markets, obligates for sale, or otherwise disposes of producer-owned cotton without the written consent of the producer;

2. Conduct business without the license required by this article;

3. Imposes false charges for the handling of cotton;

4. Fails to account promptly, accurately, fully, and properly and to make settlement;

5. Intentionally makes any false statement with regard to grade, condition, markings, quality, or quantity of cotton received, ginned, packed, shipped, or otherwise handled, to the consignor of cotton with respect to the consignor's cotton, or to the Commissioner;

6. Fails to maintain records as required by this article;

7. In any instance in which the cotton handler offers to buy the consignor's cotton, fails to disclose to the consignor that the person making the offer is composed substantially of the same persons, as stockholders, members, or otherwise, who compose the cotton handler business;

8. Refuses the Commissioner the right of entry authorized by this article;

9. Knowingly provides false information on an application for license;

10. Fails to give reasonable written notice of any change in the style, name, or personnel of the cotton handler to the Commissioner or to the surety on the bond required by this article; or

11. Violates any provision of this article or regulation adopted hereunder.

2000, c. 584, § 3.1-722.43; 2008, c. 860.