2001 Minnesota Statutes

CHAPTER 27. Wholesale produce dealers

     27.001 Public policy. 

    The legislature recognizes that perishable agricultural 
 products are important sources of revenue to a large number of 
 citizens of this state engaged in producing, processing, 
 manufacturing, or selling such products and that such products 
 cannot be repossessed in case of default.  It is therefore 
 declared to be the policy of the legislature that certain 
 financial protection be afforded those who are producers on the 
 farm; farmer cooperatives which are not wholesale produce 
 dealers as described in section 27.01, subdivision 8; and 
 licensed wholesale produce dealers, including the retail 
 merchant purchasing produce directly from farmers.  The 
 provisions of this chapter which relate to perishable 
 agricultural commodities shall be liberally construed to achieve 
 these ends and shall be administered and enforced with a view to 
 carrying out the above declaration of policy. 

    HIST: 1969 c 471 s 1; 1975 c 227 s 1 

     27.01 Definitions. 

    Subdivision 1. Repealed, 1996 c 310 s 1 

    Subd. 2.    Produce.  "Produce" means:  

    (1) perishable fresh fruits and vegetables; 

    (2) milk and cream and products manufactured from milk and 
 cream; and 

    (3) poultry and poultry products. 

    Subd. 3. Repealed, 1996 c 310 s 1 

    Subd. 4.    Voluntary extension of credit.  The term 
 "voluntary extension of credit" means a written agreement 
 between the seller and the licensee wherein the time of payment 
 for the purchase price of produce is extended beyond the due 
 date.  

    Subd. 5.    Due date.  "Due date" means ten days from 
 the date of delivery of produce by the seller to the licensee if 
 the due date is not specified in the contract.  For purposes of 
 this definition a signed invoice with a due date is a contract.  

    If produce is consigned, "due date" means ten days from the 
 date the sale is made by the broker or handler, except as to 
 milk processing plants, where the due date means 15 days 
 following the monthly day of accounting subsequent to deliveries 
 following the date fixed by each milk processing plant for that 
 accounting.  

    Subd. 6. Repealed, 1996 c 310 s 1 

    Subd. 7.    Commissioner.  "Commissioner" means the 
 commissioner of the department of agriculture.  

    Subd. 8.    Wholesale produce dealer.  (a) "Wholesale 
 produce dealer" or "dealer at wholesale" means:  

    (1) a person who buys from or contracts with a seller for 
 production or sale of produce in wholesale lots for resale; 

    (2) a person engaging in the business of a broker or agent, 
 who handles or deals in produce for a commission or fee; 

    (3) a truck owner or operator who buys produce in wholesale 
 lots for resale; and 

    (4) a person engaged in the business of a cannery, food 
 manufacturer, or food processor, who purchases produce in 
 wholesale lots as a part of that business. 

    (b) For purposes of paragraph (a), "wholesale lots" means 
 purchases from Minnesota sellers must total more than $12,000 
 annually. 

    (c) "Wholesale produce dealer" or "dealer at wholesale" 
 does not include:  

    (1) a truck owner and operator who regularly engages in the 
 business of transporting freight, including produce, for a 
 transportation fee only, and who does not purchase, contract to 
 purchase, or sell produce; 

    (2) a marketing cooperative association in which 
 substantially all of the voting stock is held by patrons who 
 patronize the association and in which at least 75 percent of 
 the business of the association is transacted with member or 
 stockholder patrons; 

    (3) a person who purchases Minnesota seasonally grown 
 perishable fresh fruits and vegetables, and pays cash, including 
 lawful money of the United States, a cashier's check, a 
 certified check, or a bank draft; 

    (4) a person who handles and deals in only canned, 
 packaged, or processed produce or packaged dairy products that 
 are no longer perishable as determined by the commissioner by 
 rule; or 

    (5) retail merchants who purchase produce, defined in 
 subdivision 2, directly from farmers, which in the aggregate 
 does not exceed $500 per month.  

    Subd. 9.  Repealed, 1996 c 310 s 1 

    Subd. 10.    Seller.  "Seller" means a farmer or 
 wholesale produce dealer, whether the person is the owner of the 
 produce or produces it for another person who holds title to it. 

    HIST: (6240-18 1/2a) 1931 c 394 s 2; 1939 c 251 s 2; 1943 c 
 479 s 1; 1953 c 345 s 1; 1961 c 113 s 1; 1961 c 128 s 9; 1961 c 
 163 s 1; 1965 c 787 s 1; 1969 c 471 s 2; 1975 c 227 s 2-4; 
 1Sp1981 c 4 art 1 s 38; 1990 c 530 s 2-5; 2000 c 477 s 24 

  27.02 Repealed, 1969 c 471 s 5 

     27.03 Dealer regulation. 

    Subdivision 1.    License.  A person may not engage in, 
 or purport to be engaged in, or hold out as being engaged in, 
 the business of a dealer at wholesale, or as being a dealer at 
 wholesale, unless licensed and bonded by the commissioner.  

    Subd. 2. Repealed, 1986 c 322 s 4 

    Subd. 3.    Brokers.  (a) A wholesale produce dealer 
 operating as a broker, upon negotiating the sale of farm 
 products, shall issue to both buyer and seller a written 
 memorandum of sale before the close of the next business day 
 showing price, date of delivery, quality, and other details of 
 the transaction.  

    (b) The memorandum required in paragraph (a) must have an 
 individual identifying number printed upon it.  Numbers must be 
 organized and printed on the memoranda so that each memorandum 
 can be identified and accounted for sequentially.  Unused or 
 damaged memoranda must be retained by the broker for accounting 
 purposes.  

    (c) A wholesale produce dealer operating as a broker may 
 not alter the terms of a transaction specified on the original 
 memorandum of sale required in paragraph (a) without the consent 
 of both parties to the transaction.  Upon making a change, the 
 broker is required to issue a clearly marked corrected 
 memorandum of sale indicating the date and time when the 
 adjustment or change was made.  The broker shall transmit the 
 corrected memorandum to both the buyer and seller before the 
 close of the next business day. 

    Subd. 4.    Payments for produce.  If there is a 
 contract between a seller and a wholesale produce dealer to buy 
 produce, the wholesale produce dealer must pay for the produce 
 that is delivered to the wholesale produce dealer at the time 
 and in the manner specified in the contract with the seller.  If 
 the due date is not set by the contract, the wholesale produce 
 dealer shall pay for the produce by ten days after delivery or 
 taking possession of the produce.  A payment received after the 
 due date must include payment of 12 percent annual interest 
 prorated for the number of days past the due date.  

    HIST: (6240-18 1/2b) 1931 c 394 s 3; 1975 c 227 s 5; 1985 c 
 233 s 4; 1986 c 444; 1990 c 530 s 6-8 

     27.04 Application for license. 

    Subdivision 1.    Issuance.  The commissioner shall 
 issue a wholesale produce dealer's license to engage in the 
 business of a dealer at wholesale to persons submitting an 
 application, paying the prescribed fee, and complying with the 
 conditions in this section. 

    Subd. 2.    Application contents.  (a) The application 
 must be in writing, accompanied by the prescribed fee, and state:

    (1) the place or places where the applicant intends to 
 carry on the business for which the license is desired; 

    (2) the estimated amount of business to be done monthly; 

    (3) the amount of business done during the preceding year, 
 if any; 

    (4) the full names of the persons constituting the firm for 
 a partnership, and for a corporation the names of the officers 
 of the corporation and where incorporated; 

    (5) a financial statement showing the value and character 
 of the assets and the amount of liabilities of the applicant; 

    (6) the income and expenses for the most recent year; 

    (7) the names and addresses of all shareholders who own at 
 least five percent of a corporate applicant's shares of stock; 

    (8) whether the applicant or any of its officers, partners, 
 or agents have been involved in any litigation relating to the 
 business of a wholesale produce dealer in the previous five 
 years; and 

    (9) any other information relevant to the conduct of its 
 business as a wholesale produce dealer in the previous five 
 years, as the commissioner may require.  

    (b) If a contract is used in a transaction, a copy of the 
 contract must also be filed with the commissioner.  

    (c) Financial data required of an applicant under this 
 section is classified as private data with regard to data on 
 individuals and as nonpublic data with regard to data not on 
 individuals under section 13.02.  

    Subd. 3.    Filing.  Applications shall be filed 
 annually.  

    HIST: (6240-18 1/2c) 1931 c 394 s 4; 1935 c 186 s 1; 1955 c 
 233 s 1; 1955 c 846 s 1; 1957 c 561 s 1; 1959 c 17 s 1; 1969 c 
 471 s 3; 1969 c 1148 s 6; 1975 c 227 s 6; 1986 c 444; 1990 c 530 
 s 9 

     27.0405 Investigations. 

    Subdivision 1.    Production and review of information.  
 (a) Upon special order, the commissioner may require persons 
 engaged in the business of a dealer at wholesale to file at the 
 time and in the manner the commissioner directs, sworn or 
 unsworn reports or answers in writing to specific questions on 
 any matter which the commissioner may investigate.  

    (b) For the purposes of this section, the commissioner or 
 the commissioner's authorized agents may audit and review any 
 records relating to the financial condition of any dealer at 
 wholesale and any transactions between the dealer and persons 
 entitled to the protections of this chapter, if the records are 
 in the possession of or under the case, custody, or control of 
 the dealer or the dealer's authorized agent.  

    Subd. 2.    False and incomplete information.  A person 
 may not willfully make any false entries or statements or fail 
 to make full and true entries and statements in a report, answer 
 required, or document demanded under this chapter.  

    Subd. 3.    Preservation of documents.  A person may not 
 remove from the state, mutilate, or alter a document relevant to 
 an investigation, hearing, or proceeding conducted under chapter 
 27. 

    HIST: 1990 c 530 s 10 

     27.041 Bonds; licenses. 

    Subdivision 1.    Bonds.  (a) The applicant required to 
 be bonded shall execute and file with the commissioner a surety 
 bond to the state of Minnesota to be approved by the 
 commissioner, the amount, form, and effective date to be 
 determined by the commissioner with the maximum not to exceed 
 $1,000,000.  In lieu of the surety bond, the commissioner may 
 accept a duly executed letter of credit.  The bond or letter of 
 credit shall be conditioned on the faithful performance of the 
 applicant's duties as a dealer at wholesale, including:  

    (1) the observance of all laws relating to the carrying on 
 of the business of a dealer at wholesale; 

    (2) payment when due, unless it appears to the commissioner 
 that a voluntary extension of credit has been given on the 
 produce by the seller to the licensee beyond the due date; 

    (3) the prompt settlement and payment of all claims and 
 charges due the state for services rendered or otherwise; 

    (4) the prompt reporting of sales as required by law to all 
 persons consigning produce to the licensee for sale on 
 commission; and 

    (5) the prompt payment to the persons entitled thereto of 
 the proceeds of the sales, less lawful charges, disbursements, 
 and commissions.  

    (b) The bond shall cover all wholesale produce business 
 subject to the protection outlined in section 27.001 which is:  

    (1) transacted within this state; or 

    (2) transacted in part within this state and in part within 
 the states and provinces contiguous with this state and sold by 
 Minnesota sellers.  

    Subd. 1a.    Additional bonds.  (a) The commissioner, 
 after determining a bond given by a licensee is inadequate for 
 the proper protection of the public, may require the licensee to 
 give additional bonds in amounts as determined by the 
 commissioner, with sureties to be approved by the commissioner, 
 and conditioned as provided in this section.  

    (b) To set or change the amount of a bond, the commissioner 
 may require a licensee to provide verified statements of the 
 licensee's business.  

    (c) Failure of the licensee to furnish the information or 
 to give a new or additional bond is cause for: 

    (1) suspension of the licensee's license for as long as the 
 failure continues; or 

    (2) revocation of the license, on ten days' notice to the 
 licensee and opportunity to be heard.  

    (d) If the commissioner determines it is in the public's 
 interest, the commissioner may suspend the license after giving 
 notice and holding a hearing. 

    Subd. 2.    Licenses.  (a) The license, or a certified 
 copy of the license, must be kept posted in the office of the 
 licensee at each place within the state where the licensee 
 transacts business.  A wholesale produce dealer may not appoint, 
 delegate, or authorize a person, firm, or company to purchase 
 produce unless a certified copy, identification card, or truck 
 decal has been issued at the request of the wholesale produce 
 dealer to that person, firm, or company acting as the buyer or 
 agent.  

    (b) A license expires June 30 following its issuance and 
 must be renewed July 1 of each year.  

    (c) A license issued under this subdivision is 
 automatically void upon the termination of the surety bond 
 covering the licensed operation.  

    (d) The fee for each license must include a $75 
 registration fee and an additional fee of .045 percent of the 
 total annual dollar amount of produce purchased the previous 
 year from sellers within the state of Minnesota subject to this 
 chapter.  Fees may not exceed $2,000 per license.  In addition, 
 a fee of $20 shall be charged for each certified copy of a 
 license, $5 for each license identification card, and $10 for 
 each license identification truck decal.  

    (e) A penalty amounting to ten percent of the fees due may 
 be imposed by the commissioner for each month for which the fees 
 are delinquent.  

    (f) A licensee who sells, disposes of, or discontinues the 
 licensee's business during the lifetime of a license shall, at 
 the time the action is taken, notify the commissioner in 
 writing, and upon demand produce before the commissioner a full 
 statement of all assets and liabilities as of the date of 
 transfer or discontinuance of the business.  

    HIST: 1975 c 227 s 7; 1981 c 356 s 265; 1983 c 293 s 52; 1986 
 c 444; 1987 c 358 s 83; 1990 c 530 s 11; 1Sp2001 c 2 s 42 

  27.05 Repealed, 1990 c 530 s 27 

     27.06 Complaints to commissioner, hearing; action on 
  bond. 

    A person claiming to be damaged by a breach of the 
 conditions of a bond given by a licensee may submit a complaint 
 to the commissioner within 40 days after the due date.  The 
 complaint must be a written statement of the facts constituting 
 the complaint.  After receiving a filed complaint, the 
 commissioner shall investigate the charges made and may have the 
 matter heard as a contested case pursuant to chapter 14 if an 
 affected party requests a hearing.  

    HIST: (6240-18 1/2e) 1931 c 394 s 6; 1935 c 186 s 2; 1955 c 
 233 s 3; 1961 c 163 s 3; 1969 c 471 s 4; 1975 c 227 s 8; 1977 c 
 346 s 4; 1982 c 424 s 130; 1986 c 444; 1990 c 530 s 12 

     27.069 Definition of produce for grading and inspection 
  laws.  

    For the purposes of Minnesota Statutes 1961, sections 27.07 
 to 27.10, and acts amendatory thereof, the term "produce" means 
 decorative forest products and the products of farms and waters 
 of this state.  

    HIST: 1965 c 787 s 2 

     27.07 Grades established; inspection. 

    Subdivision 1.    Commissioner's power.  The 
 commissioner shall have power to establish grades on all produce 
 and when deemed necessary shall provide for inspecting and 
 grading produce subject to sale at such marketing points within 
 the state as the commissioner may designate. 

    Subd. 2.    Certificates.  The commissioner shall 
 provide for the issuing of certificates of inspection showing 
 the grade, quality, and conditions of the produce, and may 
 charge and collect a reasonable fee therefor, a schedule thereof 
 to be adopted and published from time to time.  Such 
 certificates of inspection shall be prima facie evidence in all 
 courts of this state as to the grade, quality, and condition of 
 the produce at the time the inspection was made. 

    Subd. 3.    Application for inspector's services.  Any 
 person who wants produce to be inspected may apply to the 
 commissioner for the service of an inspector and, if it appears 
 to the commissioner that the volume of the produce is sufficient 
 to justify the request, the commissioner may grant the service 
 upon terms and conditions fixed by the commissioner and this 
 section. 

    Subd. 4.    Deposit agreement.  The commissioner may 
 require an agreement, prior to the establishment of the 
 inspection service, requiring the user of the inspection service 
 to at all times have on deposit with the department a sufficient 
 amount of money to pay the estimated costs of such inspection 
 service for a period of not less than 15 days in advance.  When 
 any such agreement shall terminate by action of either party 
 thereto, the commissioner shall pay to the depositor any money 
 remaining to the depositor's credit after the deduction of the 
 costs at the time such agreement terminates.  

    Subd. 5.    Fees.  Fees for inspection shall be 
 determined by the commissioner and shall be reviewed and 
 adjusted every six months.  In determining the fees to be 
 charged, the commissioner shall take into consideration fees 
 charged in other states offering similar inspection services to 
 the end that the fees charged will provide a competitive 
 marketing position for Minnesota produce. 

    Subd. 6.    Cooperative agreements; fees; account.  The 
 commissioner may collect fees as provided for in cooperative 
 agreements between the commissioner and the United States 
 Department of Agriculture for the inspection of fresh fruits, 
 vegetables, and other products.  The fees and interest 
 attributable to money in the account must be deposited in the 
 agricultural fund and credited to a fruit and vegetables 
 inspection account.  Money in the account, including interest 
 earned, is appropriated to the commissioner to administer the 
 cooperative agreements. 

    HIST: (6240-18 1/2f) 1931 c 394 s 7; 1955 c 232 s 1; 1961 c 
 163 s 4; 1975 c 204 s 97; 1977 c 234 s 1; 1986 c 444; 1987 c 358 
 s 84; 1993 c 172 s 28; 1999 c 231 s 49 

     27.08 Dealers may file brands or labels.  

    Any person producing, manufacturing, or handling, in this 
 state, any of the products mentioned in section 27.01, except 
 cheese and butter, and preparing, packing, and offering the same 
 for sale, may file with the commissioner a brand or label, and 
 the applicant may place upon this brand or label such 
 descriptive or locative matter as shall be approved by the 
 commissioner.  The commissioner may issue to such applicant for 
 brands and labels a permit to use the same, subject to such 
 rules and restrictions as to quality of product so branded as 
 the commissioner may determine.  The brand or label shall be 
 recorded in the office of the commissioner and any person who 
 shall, without authority of the commissioner, brand and label 
 therewith products or commodities of a quality below the 
 standard permitted under the brand or label, shall be subject to 
 the penal provisions of section 27.19.  

    HIST: (6240-18 1/2g) 1931 c 394 s 8; 1961 c 163 s 5; 1985 c 
 248 s 70 

     27.09 Inspection certificate.  

    When produce is ready for sale, or is on its way to market, 
 the owner thereof, or the conveyor, or the prospective buyer, or 
 any other interested party, may call for and shall be entitled 
 to inspection of such produce and to an inspection certificate, 
 as provided for in section 27.07.  

    HIST: (6240-18 1/2h) 1931 c 394 s 9 

     27.10 Produce examined, when.  

    When produce is shipped to or received by a dealer at 
 wholesale for handling, purchase, or sale in this state at any 
 market point therein giving inspection service, as provided for 
 in section 27.07, and the dealer at wholesale finds the same to 
 be in a spoiled, damaged, unmarketable, or unsatisfactory 
 condition, unless both parties shall waive inspection before 
 sale or other disposition thereof, the dealer shall cause the 
 same to be examined by an inspector assigned by the commissioner 
 for that purpose, and the inspector shall execute and deliver a 
 certificate to the applicant thereof stating the day, the time 
 and place of the inspection, and the condition of the produce 
 and mail or deliver a copy of the certificate to the shipper 
 thereof.  

    HIST: (6240-18 1/2i) 1931 c 394 s 10; 1986 c 444 

     27.11 Shipments on consignment.  

    When any dealer at wholesale to whom produce has been 
 shipped or consigned for sale on a commission basis or on 
 consignment or under any circumstances wherein the title to the 
 produce remains with the shipper, has received the same, the 
 dealer shall, within a reasonable time thereafter, make a 
 written report to the shipper, which report shall include the 
 exact time of arrival, the quantity, quality, and price per unit 
 of the produce and at the same time shall pay the shipper the 
 net amount due.  

    HIST: (6240-18 1/2j) 1931 c 394 s 11; 1986 c 444 

     27.12 Shipper may complain to commissioner.  

    When a shipper, after demand therefor, shall have received 
 no remittance or report of sale, or shall be dissatisfied with 
 the remittance, sale, or report, the shipper may complain in 
 writing to the commissioner, who shall investigate the matter 
 complained of. 

    HIST: (6240-18 1/2k) 1931 c 394 s 12; 1986 c 444 

     27.13 Investigation of complaints; suspension or 
  revocation of license. 

    The commissioner is authorized to receive complaints 
 against any persons dealing in, shipping, transporting, storing, 
 or selling produce, and shall have authority to make any and all 
 necessary investigations relative to the handling of, or 
 storing, shipping, or dealing in produce at wholesale and shall, 
 at all times, have access to all buildings, yards, warehouses, 
 storage and transportation facilities in which any produce is 
 kept, stored, handled or transacted.  For the purpose of 
 enforcing the provisions of sections 27.01 to 27.14 and 27.19, 
 the commissioner shall have the authority, upon complaint being 
 filed for any alleged violation of the provisions thereof, or 
 the rules issued thereunder, or upon information furnished by an 
 inspector of the department of agriculture, to suspend while 
 violation continues or revoke any license issued by the 
 commissioner upon ten days notice to the licensee and an 
 opportunity to be heard.  Where the public interest requires it 
 the commissioner may suspend a license after such notice pending 
 hearing and decision.  The commissioner shall have, and is 
 hereby granted, full authority to issue subpoenas requiring the 
 attendance of witnesses before the commissioner, with books, 
 papers, and other documents, articles, or instruments, and to 
 compel the disclosure by such witnesses of all facts known to 
 them relative to the matter under investigation, and shall have 
 full authority to administer oaths and to take testimony; and 
 the commissioner shall thereafter give the complainant a written 
 report of the investigation.  Such report shall be prima facie 
 evidence of the matters therein contained.  All parties 
 disobeying the orders or subpoenas of the commissioner shall be 
 guilty of contempt as in proceedings in district courts of the 
 state and may be punished in like manner.  

    HIST: (6240-18 1/2l) 1931 c 394 s 13; 1955 c 232 s 2; 1961 c 
 113 s 1; 1961 c 163 s 6; 1985 c 248 s 70; 1986 c 444; 1997 c 7 
 art 1 s 12 

     27.131 Mediation and arbitration. 

    A contract for produce between a buyer and a seller must 
 contain language providing for resolution of contract disputes 
 by either mediation or arbitration.  If there is a contract 
 dispute, either party may make a written request to the 
 department for mediation or arbitration, as specified in the 
 contract to facilitate resolution of the dispute. 

    HIST: 1990 c 530 s 13 

     27.133 Parent company liability. 

    If a wholesale produce dealer is a subsidiary of another 
 corporation, partnership, or association, the parent 
 corporation, partnership, or association is liable to a seller 
 for the amount of any unpaid claim or contract performance claim 
 if the wholesale produce dealer fails to pay or perform 
 according to the terms of the contract and this chapter.  

    HIST: 1990 c 530 s 14 

     27.137 Definitions. 

    Subdivision 1.    Applicability.  The definitions in 
 this section apply to this section and section 27.138.  

    Subd. 2. Repealed, 1996 c 310 s 1 

    Subd. 3. Repealed, 1996 c 310 s 1 

    Subd. 4. Repealed, 1996 c 310 s 1 

    Subd. 5.    Proceeds.  "Proceeds" means whatever is 
 received upon the sale, exchange, collection, or transfer of 
 produce, products of produce, or proceeds from the produce or 
 products of produce.  

    Subd. 6. Repealed, 1996 c 310 s 1 

    Subd. 7.    Products of produce.  "Products of produce" 
 means products derived from produce through manufacturing, 
 processing, or packaging.  

    Subd. 8. Repealed, 1996 c 310 s 1 

    Subd. 9.    Trust assets.  "Trust assets" means produce, 
 products of produce, and proceeds from the produce or products 
 of produce.  

    Subd. 10.    Wholesale produce dealer.  "Wholesale 
 produce dealer" has the meaning given in section 27.01, 
 subdivision 8, and includes the person whether or not the person 
 is licensed.  

    HIST: 1990 c 530 s 15 

     27.138 Wholesale produce dealers' trust. 

    Subdivision 1.    Trust establishment and maintenance.  
 (a) The produce and products of produce of a wholesale produce 
 dealer and proceeds are held in trust for the benefit of unpaid 
 sellers.  

    (b) The trust assets are to be maintained as a 
 nonsegregated floating trust.  Commingling of the trust assets 
 is contemplated.  

    (c) The wholesale produce dealer must maintain the trust 
 assets in a manner that makes the trust assets freely available 
 to satisfy the amounts owed to unpaid sellers and may not divert 
 trust assets in a manner that impairs the ability of unpaid 
 sellers to recover amounts due.  

    (d) A wholesale produce dealer must maintain the trust 
 assets in trust until payment has been made in full to unpaid 
 sellers.  Payment is not made if a seller receives a payment 
 instrument that is dishonored.  

    (e) A wholesale produce dealer holds trust assets in trust 
 for the seller, except that the wholesale produce dealer may 
 transfer title to trust assets if the proceeds of the transfer 
 are maintained as trust assets.  Until a seller is paid, a 
 wholesale produce dealer does not transfer title to trust assets:

    (1) in a transaction made to another wholesale produce 
 dealer; 

    (2) in a transaction intended to impair the ability of 
 unpaid sellers to recover amounts due; or 

    (3) for which the value is inadequate to satisfy filed 
 beneficiaries notices.  

    Subd. 2.    Sellers' rights to trust assets.  (a) An 
 unpaid seller may recover trust assets for the net amount unpaid 
 after the due date after allowing deductions of contemplated 
 expenses or advances made in connection with the transaction.  
 An amount is considered unpaid if a seller receives a payment 
 instrument that is dishonored.  

    (b) An unpaid seller may recover trust assets after filing 
 a beneficiaries notice with the wholesale produce dealer to whom 
 the produce was transferred and the commissioner, and after 
 filing in the central filing system under section 336.9-501 as 
 if the trust were a security interest in the trust assets by 40 
 days after the due date for the payment to the seller or 40 days 
 after a payment instrument to the seller for the produce is 
 dishonored, whichever is later.  

    Subd. 3.    Beneficiaries notice.  (a) A beneficiaries 
 notice must be in writing and in a form prescribed by the 
 commissioner.  

    (b) The beneficiaries notice must contain:  

    (1) the name and address of the seller; 

    (2) the name and address of the wholesale produce dealer 
 maintaining the trust assets; 

    (3) the produce, amount of produce, amount to be paid the 
 seller, and the due date of transactions that are unpaid or, if 
 appropriate, the date a payment instrument was dishonored; and 

    (4) a description of the trust assets.  

    (c) The filing officer shall enter on the initial financing 
 statement filed pursuant to this section the time of day and 
 date of filing.  The filing officer shall accept filings, 
 amendments, and terminations of an initial financing statement 
 filed pursuant to this section and charge the same filing fees 
 as provided in section 336.9-525.  An initial financing 
 statement filed pursuant to this section is void and may be 
 removed from the filing system 18 months after the date of 
 filing.  The beneficiaries notice may be physically destroyed 30 
 months after the date of filing.  

    Subd. 4.    Priority of unpaid sellers' interests in trust 
 assets.  (a) The unpaid seller's interest in trust assets is 
 paramount to all other liens, security interests, and 
 encumbrances in the trust assets.  An unpaid seller who recovers 
 trust assets recovers them free of any liens, security 
 interests, or encumbrances.  

    (b) If the trust assets are inadequate to pay unpaid 
 sellers the amount due, the unpaid sellers shall share 
 proportionately in the trust assets.  

    Subd. 5.    Recovery actions.  An action to recover 
 trust assets may be brought in district court in a county where 
 trust assets are located after the beneficiaries notice is 
 filed.  The beneficiaries notice may be amended, except the 
 amount due, by leave of the court in furtherance of justice.  An 
 action to recover trust assets is barred if it is not brought by 
 18 months after the date the beneficiaries notice is filed.  

    Subd. 6.    Terminations of beneficiaries notice.  A 
 seller must terminate a beneficiaries notice by ten days after 
 the amount due for the wholesale produce dealer is paid.  The 
 commissioner may terminate a beneficiaries notice upon request 
 and demonstration by the wholesale produce dealer that the 
 amounts due under the beneficiaries notice have been paid. 

    HIST: 1990 c 530 s 16; 1991 c 199 art 1 s 7; 2001 c 195 art 2 
 s 1,2 

     27.14 Rules. 

    In the manner provided by law, the commissioner, from time 
 to time, shall make and publish uniform rules, not inconsistent 
 with law, for carrying out and enforcing the provisions of 
 sections 27.01 to 27.14 and 27.19 and governing the rates 
 charged by, and the buying, selling, advertising and trading 
 practices of, dealers at wholesale.  

    HIST: (6240-18 1/2m) 1931 c 394 s 14; 1961 c 163 s 7; 1985 c 
 248 s 70; 1997 c 7 art 1 s 12 

  27.15 Repealed, 1996 c 310 s 1 

  27.16 Renumbered 29.201 

  27.17 Renumbered 29.203 

  27.18 Renumbered 29.205 

  27.185 Repealed, 1Sp2001 c 2 s 162 

     27.19 Violations, penalties. 

    Subdivision 1.    Prohibited acts.  (a) A person subject 
 to the provisions of this section and sections 27.01 to 27.14 
 may not:  

    (1) operate or advertise to operate as a dealer at 
 wholesale without a license; 

    (2) make any false statement or report as to the grade, 
 condition, markings, quality, or quantity of produce, as defined 
 in section 27.069, received or delivered, or act in any manner 
 to deceive a consignor or purchaser; 

    (3) refuse to accept a shipment contracted for by the 
 person, unless the refusal is based upon the showing of a state 
 inspection certificate secured with reasonable promptness after 
 the receipt of the shipment showing that the kind and quality of 
 produce, as defined in section 27.069, is other than that 
 purchased or ordered by the person; 

    (4) fail to account or make a settlement for produce within 
 the required time; 

    (5) violate or fail to comply with the terms or conditions 
 of a contract entered into by the person for the purchase, 
 production, or sale of produce; 

    (6) purchase for a person's own account any produce 
 received on consignment, either directly or indirectly, without 
 the consent of the consignor; 

    (7) issue a false or misleading market quotation, or cancel 
 a quotation during the period advertised by the person; 

    (8) increase the sales charges on produce shipped to the 
 person by means of "dummy" or fictitious sales; 

    (9) receive decorative forest products and the products of 
 farms and waters from foreign states or countries for sale or 
 resale, either within or outside of the state, and give the 
 purchaser the impression, through any method of advertising or 
 description, that the produce is of Minnesota origin; 

    (10) fail to notify in writing all suppliers of produce of 
 the protection afforded to suppliers by the person's licensee 
 bond, including:  availability of a bond, notice requirements, 
 and any other conditions of the bond; 

    (11) make a false statement to the commissioner on an 
 application for license or bond or in response to written 
 questions from the commissioner regarding the license or bond; 

    (12) commit to pay and not pay in full for all produce 
 committed for.  A processor may not pay an amount less than the 
 full contract price if the crop produced is satisfactory for 
 processing and is not harvested for reasons within the 
 processor's control.  If the processor sets the date for 
 planting, then bunching, unusual yields, and a processor's 
 inability or unwillingness to harvest must be considered to be 
 within the processor's control.  Under this clause growers must 
 be compensated for passed acreage at the same rate for grade and 
 yield as they would have received had the crop been harvested in 
 a timely manner minus any contractual provision for green manure 
 or feed value.  Both parties are excused from payment or 
 performance for crop conditions that are beyond the control of 
 the parties; or 

    (13) discriminate between different sections, localities, 
 communities, or cities, or between persons in the same 
 community, by purchasing produce from farmers of the same grade, 
 quality, and kind, at different prices, except that price 
 differentials are allowed if directly related to the costs of 
 transportation, shipping, and handling of the produce and a 
 person is allowed to meet the prices of a competitor in good 
 faith, in the same locality for the same grade, quality, and 
 kind of produce.  A showing of different prices by the 
 commissioner is prima facie evidence of discrimination.  

    (b) A separate violation occurs with respect to each 
 different person involved, each purchase or transaction 
 involved, and each false statement. 

    Subd. 2.    Civil penalty.  (a) A person who violates a 
 provision of this chapter or rules adopted under this chapter is 
 subject to a civil penalty not to exceed $500 per violation.  

    (b) In addition, the person's license may be suspended, 
 revoked, or canceled by the commissioner, upon ten days' notice 
 and opportunity to be heard.  Action under this subdivision is a 
 civil penalty.  

    (c) A civil penalty amount received by the commissioner 
 under this section must be deposited in the wholesale produce 
 dealer account. 

    Subd. 3.    Criminal penalty.  (a) A person who 
 willfully violates a provision of this chapter or rules adopted 
 under this chapter is guilty of a misdemeanor.  

    (b) Upon conviction, or upon conviction in a federal court 
 for violation of the federal statutes relative to fraudulent use 
 of the mails or in any court of other criminal acts under a 
 federal food or drug statute or a statute of this state 
 administered by the commissioner of agriculture pertaining to 
 the conduct of the person's business, the commissioner may 
 immediately revoke and cancel the license of the person 
 convicted, without further hearing.  

    Subd. 4.    Settlements.  (a) The commissioner or the 
 commissioner's authorized representative may enter into a 
 written agreement with a person in settlement of an alleged 
 violation whether or not a hearing is held.  An agreement must 
 be construed as a "no contest" pleading and may encompass 
 sanctions, penalties, and affirmative actions that are mutually 
 satisfactory and are consistent with the intent and purpose of 
 this chapter.  

    (b) The agreement is final and conclusive with respect to 
 the action, except upon a showing of fraud or malfeasance or 
 misrepresentation of a material fact.  The matter agreed upon in 
 the agreement may not be reopened or modified by an officer, 
 employee, or agent of the state.  In an action, suit, or 
 proceeding, the agreement and any determination or payment made 
 under the agreement is final and conclusive and may not be 
 annulled, modified, set aside, or disregarded.  

    HIST: (6240-18 1/2o) 1931 c 394 s 16; 1955 c 232 s 4; 1959 c 
 17 s 2; 1961 c 113 s 1; 1961 c 163 s 9; 1965 c 787 s 3; 1975 c 
 227 s 9; 1985 c 248 s 70; 1986 c 444; 1990 c 530 s 18; 1991 c 
 254 art 3 s 14; 1997 c 7 art 1 s 12; 2000 c 477 s 25 

     27.20 Enforcement. 

    The commissioner shall be charged with the enforcement of 
 the provisions of sections 27.01 to 27.14 and 27.19 and of the 
 rules made and published thereunder.  Upon complaint made it 
 shall be the duty of the county attorney to prosecute all cases 
 arising in the attorney's county for violation of sections 27.01 
 to 27.14 and 27.19, or of the rules made and published 
 thereunder.  The commissioner and duly authorized agents and 
 inspectors appointed by the commissioner for the purpose of 
 enforcing the provisions of sections 27.01 to 27.14 and 27.19 
 shall have the power of police officers in this enforcement.  

    HIST: (6240-18 1/2p) 1931 c 394 s 17; 1935 c 186 s 3; 1955 c 
 232 s 5; 1961 c 163 s 10; 1985 c 248 s 70; 1986 c 444; 1997 c 7 
 art 1 s 12