§ 106-465. Organization and membership of tobacco boards of trade; rules and regulations; fire insurance and extended coverage required; price fixing prohibited. - North Carolina Statutes

§ 106‑465. Organization and membership of tobacco boards of trade; rules and regulations;fire insurance and extended coverage required; price fixing prohibited.

Tobacco warehousemen and the purchasers of leaf tobacco, at auction, onwarehouse floors, are hereby authorized to organize, either as nonstockcorporations, or voluntary associations, tobacco boards of trade in the severaltowns and cities in North Carolina in which leaf tobacco is sold on warehousefloors, at auction.

Such tobacco boards of trade as may now exist, or which may hereafterbe organized, are authorized to make reasonable rules and regulations for theeconomical and efficient handling of the sale of leaf tobacco at auction on thewarehouse floors in the several towns and cities in North Carolina in which anauction market is situated.

Each tobacco board of trade organized pursuant to this section shall,on or before June 1, 1973, by regulation, require that all auction warehousefirms which are members of, or may hereafter request membership in, such boardof trade for the purpose of displaying for sale and selling leaf tobacco,deposit with the board of trade prior to the market opening, a copy of a policyof fire insurance and extended coverage in a company licensed to do business inNorth Carolina to fully insure, as determined by the board of trade, the marketvalue of the maximum volume of tobacco that will be weighed and left displayedfor sale on said warehouse floor at any time during the marketing season.Warehouses using mechanized conveyor‑line auction sales where tobacco isnot displayed for sale on sales floor would be excluded from the requirement ofthis regulation.

In determining the market value and maximum volume of tobacco that willbe weighed and placed on said warehouse floor at any one time, the board oftrade shall use as criteria the prior season's official gross average price forthat belt, as recorded by the North Carolina Department of Agriculture andConsumer Services and the maximum limit of daily sales, as recommended by thecurrently functioning flue‑cured and burley tobacco marketingorganizations, applied to each warehouse based on the firm's pro rata share ofthe market's maximum limit daily sales opportunity, multiplied times the numberof days of sales that said warehouse plans to place on sales floor at any onetime, including any and all tobacco weighed and deposited with the warehouse asbailee for future sale. The data relating to the official average price and themaximum limits of daily sales shall be assembled and supplied by the NorthCarolina Commissioner of Agriculture or his representative to the board oftrade in each tobacco market in North Carolina, at least 30 days prior to theopening of markets in each belt.

It shall be unlawful for any person, firm, or corporation to operate anauction sale in said market until said policy is so deposited with and approvedby the board of trade. The board of trade shall enjoin the sale of tobacco byany warehouse firm that fails to so deposit a policy of fire insurance andextended coverage with the board.

The tobacco boards of trade in the several towns and cities in NorthCarolina are authorized to require as a condition to membership therein theapplicants to pay a reasonable membership fee and the following schedule ofmaximum fees shall be deemed reasonable, to wit:

A membership fee of fifty dollars ($50.00) in those towns in which lessthan 3,000,000 pounds of tobacco was sold at auction between the dates ofAugust 20, 1931, and May 1, 1932; a fee of one hundred dollars ($100.00) inthose towns in which during said period of time more than 3,000,000 and lessthan 10,000,000 pounds of tobacco was sold; a fee of one hundred fifty dollars($150.00) in those towns in which during said period of time more than10,000,000 and less than 25,000,000 pounds of tobacco was sold; a fee of threehundred dollars ($300.00) in those towns in which during said period of timemore than 25,000,000 pounds of tobacco was sold.

Membership, in good standing, in a local board of trade shall be deemeda reasonable requirement by such board of trade as a condition to participatingin the business of operating a tobacco warehouse or the purchase of tobacco atauction therein.

Membership in the several boards of trade may be divided into twocategories:

(1)        Warehousemen;

(2)        Purchasers of leaf tobacco other than warehousemen.

Purchasers of leaf tobacco may be: (i) participating or (ii)nonparticipating. The holder of a membership as a purchaser of leaf tobaccoshall have the option of becoming, upon written notice to the board of trade,either a participating or a nonparticipating member. Individuals, partnerships,and/or corporations who are members of tobacco boards of trade, establishedunder this section or coming within the provisions of this section, asnonparticipating members shall not participate in or have any voice or vote inthe management, conduct, activities, allotment of sales time, and/or hours, thefixing of dates for the opening or closing of tobacco auction markets, or inany other manner or respect. Individuals, partnerships, and/or corporations whoare such nonparticipating members in any of the several tobacco boards of tradeshall not be responsible or liable for any of the acts, omissions orcommissions of the several tobacco boards of trade.

It shall be unlawful and punishable as of a Class 1 misdemeanor for anybidder or purchaser of tobacco upon warehouse floors to refuse to take and payfor any basket or baskets so bid off from the seller when the seller has or hasnot accepted the price offered by the purchaser or bidder of other baskets. Anyperson suspended or expelled from a tobacco board of trade under the provisionsof this section may appeal from such suspension to the superior court of thecounty in which said board of trade is located.

Nothing in this section shall authorize the organization of anyassociation having for its purpose the control of prices or the making of rulesand regulations in restraint of trade. (1933, c. 268; 1951, c. 383; 1973, c. 96; 1993, c. 539, s. 790; 1994,Ex. Sess., c. 24, s. 14(c); 1997‑261, s. 109.)