CHAPTER 147. LIVESTOCK COMMISSION MERCHANTS - Texas Statutes

AGRICULTURE CODE

TITLE 6. PRODUCTION, PROCESSING, AND SALE OF ANIMAL PRODUCTS

SUBTITLE B. LIVESTOCK

CHAPTER 147. LIVESTOCK COMMISSION MERCHANTS

SUBCHAPTER A. GENERAL PROVISIONS

Sec. 147.001. DEFINITIONS. In this chapter:

(1) "Commission merchant" means a livestock commission merchant

or a livestock auction commission merchant.

(2) Repealed by Acts 2003, 78th Leg., ch. 604, Sec. 5.

Acts 1981, 67th Leg., p. 1378, ch. 388, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 2003, 78th Leg., ch. 604, Sec. 5, eff.

Sept. 1, 2003.

Sec. 147.002. COMMISSION MERCHANTS. (a) A person is subject to

this chapter as a livestock commission merchant if the person:

(1) pursues the business of selling livestock on consignment for

a commission or other charges;

(2) solicits consignment of livestock as a livestock commission

merchant; or

(3) advertises or holds himself or herself out to be a livestock

commission merchant.

(b) A person is subject to this chapter as a livestock auction

commission merchant if the person:

(1) pursues the business of selling livestock at auction on

consignment for a commission or other charges;

(2) solicits consignment of livestock as a livestock auction

commission merchant; or

(3) advertises or holds himself or herself out to be a livestock

auction commission merchant.

Acts 1981, 67th Leg., p. 1378, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 147.003. EXCEPTIONS. (a) A person pursuing the business

of selling mules, horses, jacks, or jennets in a county with a

population of not less than 1.4 million nor more than 1.5 million

is not subject to this chapter as a livestock auction commission

merchant.

(b) Sections 147.004, 147.022(a)(3), 147.022(b), 147.023,

147.024, and 147.041(a) do not apply to a livestock auction

commission or company that is subject to and regulated by the

United States Department of Agriculture under the Packers and

Stock Yards Act (7 U.S.C. Sec. 181 et seq.).

Acts 1981, 67th Leg., p. 1378, ch. 388, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1991, 72nd Leg., ch. 597, Sec. 55, eff.

Sept. 1, 1991; Acts 2001, 77th Leg., ch. 669, Sec. 1, eff. Sept.

1, 2001.

Sec. 147.004. REMITTANCE OF SALE PROCEEDS. (a) Within 48 hours

after the sale of consigned livestock, a commission merchant

shall:

(1) remit the net proceeds of the sale to each person entitled

to receive those proceeds or to another person to whom the person

directs that the proceeds be paid; or

(2) if requested by a person, deposit the proceeds due that

person to the credit of that person in a state or national bank

in the city or county of the commission merchant's principal

place of business.

(b) In calculating the time allowed for remittance of proceeds

under this section by a livestock commission merchant, Sundays,

holidays, and the day of sale are excluded. In calculating the

time allowed for remittance of proceeds under this section by a

livestock auction commission merchant, Sundays, holidays, and the

day of sale are included.

Acts 1981, 67th Leg., p. 1379, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 147.005. DEPOSIT OF PROCEEDS IN DISPUTE. (a) If the

proceeds of a sale of livestock by a commission merchant become

involved in a dispute between contending claimants, or if the

commission merchant is notified that a person other than the

person who consigned the livestock asserts a right to the

proceeds, the commission merchant shall deposit the net proceeds

of the sale in a state or national bank in the city or county of

the commission merchant's principal place of business.

(b) The commission merchant shall promptly notify all interested

parties of the deposit of proceeds in a bank under Subsection (a)

of this section.

(c) Following the deposit of the proceeds and the giving of

notice under this section, neither the commission merchant nor

the bond of the commission merchant is liable for those funds.

Acts 1981, 67th Leg., p. 1379, ch. 388, Sec. 1, eff. Sept. 1,

1981.

SUBCHAPTER B. BOND

Sec. 147.021. BOND REQUIRED. Before engaging in business as a

commission merchant, a person shall file a bond with the county

judge of the county of the commission merchant's principal place

of business.

Acts 1981, 67th Leg., p. 1379, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 147.022. TERMS AND CONDITIONS OF BOND. (a) Each bond

filed under this chapter must be:

(1) signed by a solvent surety company authorized to do business

in this state and having a paid-up capital of at least $500,000;

(2) payable to the county judge of the county of the commission

merchant's principal office or place of business as trustee for

all persons who may be entitled to recover under the bond; and

(3) conditioned that the commission merchant will comply with

the requirements of this chapter and will well and truly perform

all agreements entered into with a consignor or owner of

livestock, or with a person holding a lien on livestock, in

relation to receiving, handling, and selling the livestock and

remitting the net proceeds of a sale.

(b) Each bond must contain a provision requiring that, in order

to terminate a bond, the terminating party must give at least 10

days' written notice to the county judge prior to the

termination.

Acts 1981, 67th Leg., p. 1379, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 147.023. AMOUNT OF BOND. (a) Except as otherwise provided

by this section, the amount of each commission merchant's bond

must be equal to the nearest multiple of $1,000 that is more than

twice the average amount of the commission merchant's sales and

purchases of livestock on a business day during the preceding

year or portion of a year in which the person engaged in business

as a commission merchant. The average amount of sales and

purchases for one day is determined by dividing the total sales

and purchases for the preceding year by 308, regardless of the

actual number of business days.

(b) A bond may not be in an amount less than $2,000.

(c) If the amount equal to twice the average sales and purchases

of a commission merchant on a business day exceeds $50,000, the

bond must be in an amount equal to $50,000 plus 10 percent of the

amount of sales and purchases in excess of $50,000.

(d) If prior to filing bond a person has no previous sales and

purchases on which to determine the amount of the bond, the bond

must be in an amount adequate to cover the probable volume of

business to be done by that person, as determined by the county

judge of the county of the commission merchant's principal place

of business. After that person has engaged in business as a

commission merchant for one year, the amount of the bond shall be

determined as otherwise provided by this section.

(e) If in the judgment of the county judge the condition of the

business of a livestock commission merchant renders the bond

inadequate, the county judge shall notify the livestock

commission merchant and the commission merchant shall increase

the bond to an amount determined adequate by the county judge.

Acts 1981, 67th Leg., p. 1380, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 147.024. MORE THAN ONE PERSON UNDER SINGLE BOND. (a) If

two or more commission merchants are employees or agents solely

for one person, they may be covered by a single bond in an amount

determined under Section 147.023 of this code on the basis of

combined purchases and sales.

(b) Two or more commission merchants not subject to Subsection

(a) of this section may be covered under a single bond in an

amount not less than the aggregate amount of individual bonds

required under Section 147.023 of this code.

Acts 1981, 67th Leg., p. 1380, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 147.025. APPROVAL OF BOND BY COUNTY JUDGE. (a) The county

judge shall carefully examine each commission merchant's bond and

shall approve a bond if satisfied that it conforms to the

requirements of this subchapter.

(b) Before approving the bond of a livestock commission

merchant, the county judge shall obtain certified data relating

to the surety company from the commissioner of insurance.

Acts 1981, 67th Leg., p. 1380, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 147.026. RECORDING OF BOND AND STATEMENT OF SALES. (a)

The county judge shall file each commission merchant's bond with

the county clerk, who shall record the bond at length in records

maintained for that purpose labeled "Bonds of Livestock

Commission Merchants" or "Bonds of Livestock Auction Commission

Merchants," as applicable. The records must be properly indexed.

(b) If the person filing the bond is a livestock commission

merchant, the person shall also file a sworn statement with the

county judge setting forth the average daily sales of the person

for the preceding year. The county clerk shall record the

statement in the same manner as the bond.

(c) The county clerk shall file the original bond and sworn

statement of a livestock commission merchant in the clerk's

office.

Acts 1981, 67th Leg., p. 1381, ch. 388, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1989, 71st Leg., ch. 1248, Sec. 23, eff.

Sept. 1, 1989.

Sec. 147.027. COMMISSION MERCHANT'S COPY OF BOND. As soon as

practicable after the recording of a bond, a commission merchant

shall request, and the county clerk shall provide, a certified

copy of the bond. The commission merchant shall post that copy in

a conspicuous place in the main office of the commission

merchant's principal place of business.

Acts 1981, 67th Leg., p. 1381, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 147.028. SUIT ON BOND. (a) Any person damaged by breach

of a condition of a bond may bring suit and recover under the

bond. The suit shall be brought in the county in which the bond

is filed.

(b) A bond is not void on first recovery and may be sued on

until the total amount is exhausted. If a bond is reduced by

one-half, the commission merchant shall file a new bond,

conditioned as provided by this subchapter for the original bond,

in an amount necessary to restore the bond to the amount required

by Section 147.023 of this code.

Acts 1981, 67th Leg., p. 1381, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 147.029. INSOLVENCY OF SURETY. If the county judge

discovers that the surety on a bond is insolvent or determines

that the surety is financially unable to make the bond

sufficient, the county judge shall notify the commission merchant

and the commission merchant shall execute a new bond in

accordance with the requirements for the original bond.

Acts 1981, 67th Leg., p. 1381, ch. 388, Sec. 1, eff. Sept. 1,

1981.

SUBCHAPTER C. RECORDS

Sec. 147.041. RECORD OF SALES. (a) Each livestock auction

commission merchant shall keep a record of all livestock sold at

auction. The record must give an accurate description of the

livestock, including:

(1) the color;

(2) the probable age;

(3) any marks and brands; and

(4) the location of marks and brands.

(b) Records maintained under Subsection (a) of this section are

subject to inspection by any citizen of this state.

(c) Each livestock auction commission merchant shall file a

quarterly report of all livestock sold with the commissioners

court of the county in which the commission merchant transacts

business. The report must include:

(1) a description of the livestock;

(2) the name and address of the consignor or the person

purporting to own the livestock; and

(3) the name and address of the purchaser.

Acts 1981, 67th Leg., p. 1381, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 147.042. RECORD OF TRANSPORTATION. (a) Each livestock

auction commission merchant shall keep a record of the motor

vehicle and trailer or semitrailer on which livestock is

transported to the place of sale. The record must be in a form

prescribed by the Texas Animal Health Commission and must show

the name of the owner of the livestock, the name of the owner of

the vehicle, and the name, make, and license plate number of the

vehicle. The commission merchant shall prepare the record and

make it available for public inspection within 24 hours after

receipt of the livestock.

(b) Each livestock auction commission merchant shall keep a

record of the motor vehicle and trailer or semitrailer on which

livestock is transported from the place of sale. The record must

be in a form prescribed by the Texas Animal Health Commission and

must show the name and address of the purchaser of the livestock

and the name and address of the owner of the vehicle. The

commission merchant shall prepare the record and make it

available immediately after the livestock is sold and before the

livestock is removed from the place of sale.

(c) The livestock auction commission merchant shall furnish a

copy of the record under Subsection (b) of this section to the

driver of the vehicle transporting the livestock from the place

of sale. The driver shall keep that record in the driver's

possession while transporting the livestock and shall exhibit the

record on demand of any peace officer.

(d) Each livestock auction commission merchant shall retain

records kept under this section for at least one year after the

date of sale. The commission merchant shall keep the records open

for public inspection at reasonable hours.

(e) This section does not apply to a private sale in which the

livestock of only one person is offered for sale.

Acts 1981, 67th Leg., p. 1382, ch. 388, Sec. 1, eff. Sept. 1,

1981.

SUBCHAPTER D. PENALTIES

Sec. 147.061. FAILURE TO FILE OR MAINTAIN BOND. (a) A person

commits an offense if the person:

(1) advertises or solicits business, or engages in business, as

a livestock commission merchant without filing a bond in

accordance with this chapter; or

(2) as a livestock commission merchant, fails to maintain a bond

in full force and effect in accordance with this chapter.

(b) A person commits an offense if the person:

(1) advertises or solicits business, or engages in business, as

a livestock auction commission merchant without filing a bond in

accordance with this chapter; or

(2) as a livestock auction commission merchant, fails to

maintain a bond in full force and effect in accordance with this

chapter.

(c) An offense under Subsection (a) is a felony punishable by:

(1) a fine of not less than $500 nor more than $5,000;

(2) imprisonment in the Texas Department of Criminal Justice for

not less than one nor more than two years; or

(3) both fine and imprisonment under this subsection.

(d) An offense under Subsection (b) of this section is a

misdemeanor punishable by:

(1) a fine of not less than $25 nor more than $1,000;

(2) confinement in county jail for not more than 30 days; or

(3) both fine and confinement under this subsection.

Acts 1981, 67th Leg., p. 1382, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

87, Sec. 25.003, eff. September 1, 2009.

Sec. 147.062. FAILURE TO POST COPY OF BOND. (a) A person

commits an offense if the person fails to post a copy of the

person's bond in accordance with Section 147.027 of this code.

(b) An offense under this section is a misdemeanor punishable by

a fine of not more than $100.

(c) A person commits a separate offense each day that the copy

is not posted.

Acts 1981, 67th Leg., p. 1383, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Sec. 147.063. FAILURE TO REMIT PROCEEDS OF SALE. (a) A person

commits an offense if, as a livestock commission merchant, the

person intentionally fails and refuses to remit the net proceeds

of a sale of livestock in accordance with Section 147.004 of this

code.

(b) A person commits an offense if, as a livestock auction

commission merchant, the person intentionally fails and refuses

to remit the net proceeds of a sale of livestock in accordance

with Section 147.004 of this code.

(c) An offense under Subsection (a) of this section is a

misdemeanor punishable by:

(1) a fine of not less than $100 nor more than $1,000;

(2) confinement in county jail for not less than 1 month nor

more than 12 months; or

(3) both fine and confinement under this subsection.

(d) An offense under Subsection (b) of this section is a

misdemeanor punishable by:

(1) a fine of not less than $25 nor more than $100;

(2) confinement in county jail for not more than 30 days; or

(3) both fine and confinement under this subsection.

Acts 1981, 67th Leg., p. 1383, ch. 388, Sec. 1, eff. Sept. 1,

1981. Amended by Acts 1983, 68th Leg., p. 995, ch. 235, art. 1,

Sec. 5, eff. Sept. 1, 1983.

Sec. 147.064. APPROPRIATION OF PROCEEDS OF SALE. (a) A person

commits an offense if, as a livestock commission merchant, the

person appropriates or uses any portion of the net proceeds of

the sale of livestock for a purpose other than remitting the

proceeds under Section 147.004 of this code.

(b) A person commits an offense if, as a livestock auction

commission merchant, the person appropriates or uses any portion

of the net proceeds of the sale of livestock for a purpose other

than remitting the proceeds under Section 147.004 of this code.

(c) An offense under Subsection (a) is a felony punishable by

imprisonment in the Texas Department of Criminal Justice for not

less than two years nor more than four years.

(d) An offense under Subsection (b) of this section is a

misdemeanor punishable by:

(1) a fine of not more than $1,000; and

(2) confinement in county jail for not more than one year.

Acts 1981, 67th Leg., p. 1383, ch. 388, Sec. 1, eff. Sept. 1,

1981.

Amended by:

Acts 2009, 81st Leg., R.S., Ch.

87, Sec. 25.004, eff. September 1, 2009.

Sec. 147.065. FAILURE TO KEEP OR EXHIBIT TRANSPORTATION RECORDS.

(a) A person commits an offense if the person violates Section

147.042 of this code.

(b) An offense under this section is a misdemeanor punishable by

a fine of not more than $200.

Acts 1981, 67th Leg., p. 1384, ch. 388, Sec. 1, eff. Sept. 1,

1981.