Virginia Law

Article 3. Dealers in Agricultural Produce.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.