
From the U.S. Code Online via GPO Access
[wais.access.gpo.gov]
[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 7USC196]

 
                          TITLE 7--AGRICULTURE
 
                    CHAPTER 9--PACKERS AND STOCKYARDS
 
                    SUBCHAPTER II--PACKERS GENERALLY
 
                       Part A--General Provisions
 
Sec. 196. Statutory trust established; livestock


(a) Protection of public interest from inadequate financing arrangements

    It is hereby found that a burden on and obstruction to commerce in 
livestock is caused by financing arrangements under which packers 
encumber, give lenders security interest in, or place liens on, 
livestock purchased by packers in cash sales, or on inventories of or 
receivables or proceeds from meat, meat food products, or livestock 
products therefrom, when payment is not made for the livestock and that 
such arrangements are contrary to the public interest. This section is 
intended to remedy such burden on and obstruction to commerce in 
livestock and protect the public interest.

(b) Livestock, inventories, receivables and proceeds held by packer in 
        trust for benefit of unpaid cash sellers; time limitations; 
        exempt packers; effect of dishonored instruments; preservation 
        of trust benefits by seller

    All livestock purchased by a packer in cash sales, and all 
inventories of, or receivables or proceeds from meat, meat food 
products, or livestock products derived therefrom, shall be held by such 
packer in trust for the benefit of all unpaid cash sellers of such 
livestock until full payment has been received by such unpaid sellers: 
Provided, That any packer whose average annual purchases do not exceed 
$500,000 will be exempt from the provisions of this section. Payment 
shall not be considered to have been made if the seller receives a 
payment instrument which is dishonored: Provided, That the unpaid seller 
shall lose the benefit of such trust if, in the event that a payment 
instrument has not been received, within thirty days of the final date 
for making a payment under section 228b of this title, or within fifteen 
business days after the seller has received notice that the payment 
instrument promptly presented for payment has been dishonored, the 
seller has not preserved his trust under this subsection. The trust 
shall be preserved by giving written notice to the packer and by filing 
such notice with the Secretary.

(c) Definition of cash sale

    For the purpose of this section, a cash sale means a sale in which 
the seller does not expressly extend credit to the buyer.

(Aug. 15, 1921, ch. 64, title II, Sec. 206, as added Pub. L. 94-410, 
Sec. 8, Sept. 13, 1976, 90 Stat. 1251.)
