56701-56717
FOOD AND AGRICULTURAL CODE
SECTION 56701-56717
56701. There is in the Department of Agriculture Fund the Farm Products Trust Fund, which is hereby created. 56701.5. (a) No further claims shall be made against the products fund subsequent to January 1, 1998, and no further assessment may be collected for deposit in the fund after January 1, 1999. (b) The department shall continue to administer the products fund for the purpose of paying lawful charges accrued but not paid as of December 31, 1997. Upon completion of the last of these claims, the products fund shall cease to exist, and any funds remaining on deposit shall be distributed on a pro rata basis to then existing licensees. 56702. For the purposes of this chapter, "products fund" means the Farm Products Trust Fund. 56702.5. "Farm products creditor" means either of the following: (a) A person who produced and sold a farm product produced in this state to a person licensed pursuant to Chapter 6 (commencing with Section 55401) or Chapter 7 (commencing with Section 56101) who failed to pay for the farm product. (b) A person licensed pursuant to Chapter 7 (commencing with Section 56101) who sold or handled a farm product produced in this state to a person licensed pursuant to Chapter 6 (commencing with Section 55401) or Chapter 7 (commencing with Section 56101) who failed to pay for the farm product. 56703. In addition to the fees required under Article 16 (commencing with Section 55861) of Chapter 6 and Article 17 (commencing with Section 56571) of Chapter 7, each principal applicant for a license, or for the renewal of a license, under Chapter 6 (commencing with Section 55401) or Chapter 7 (commencing with Section 56101) shall pay to the director an annual fee of one hundred twenty-five dollars ($125) which shall be paid before the director issues or renews any such license. If any person is found to be operating a business without the license required by Chapter 6 (commencing with Section 55401) or Chapter 7 (commencing with Section 56101), that person shall pay to the director double the amount of the annual fee. All the fees collected pursuant to this chapter shall be deposited in the products fund. The director may establish a lower annual fee if he or she finds it to be sufficient to defray the costs in carrying out this chapter. This chapter does not apply to any licensee who pays to the seller, at the time of obtaining title, possession, or control, or at the time of contracting for the title, possession, or control, of any farm product, the full agreed purchase price of the farm product in coin or currency, lawful money of the United States, or to any licensee who purchases livestock and is bonded under the federal Packers and Stockyards Act, 1921 (7 U.S.C. Sec. 181, et seq.). 56704. The money deposited in the products fund shall only be used to pay for farm products grown or produced within this state which have not been otherwise paid for. However, claims made against the fund may include charges for services which by custom of the trade are incidental to the sale and generally accepted as being included in the purchase price. Any moneys remaining in the products fund after all the claims have been settled, discharged, or paid in any year shall be credited to the funds to be used in any other year, and the director, in view of this, shall adjust the fees provided for under Section 56703 in accordance with the provisions of that section. 56704.5. Claims may only be made against the products fund by a farm products creditor. 56705. If a person licensed under Chapter 6 (commencing with Section 55401) or Chapter 7 (commencing with Section 56101) fails to pay a farm products creditor for any farm product which is received by the licensee, the director shall ascertain the names and addresses of all farm products creditors together with the amounts which are due and owing to them and each of them by the licensee and shall request all of those farm products creditors to file a verified statement of their respective claims with the director. The request shall be addressed to each creditor at his or her last known address. If by reason of the absence of records, or other circumstances which make it impossible or unreasonable for the director to ascertain the names and addresses of all of the farm products creditors, the director, after exerting due diligence and making reasonable inquiry to secure the information from all reasonable and available sources, may make demand upon the products fund on the basis of information then in his or her possession, and thereafter is not liable or responsible for claims or the handling of claims which may subsequently appear or be discovered. 56705.5. Only those claims filed pursuant to Section 56705 or as a result of a verified complaint filed pursuant to Section 55751 or 56451 shall be accepted by the director as a proper claim upon the products fund. 56706. If the farm products creditor fails, refuses, or neglects to file in the office of the director his or her verified claim as requested by the director under this chapter, within 60 days from the date of the request, the director is relieved of further duty or liability pursuant to this chapter on behalf of the farm products creditor. 56707. Upon ascertaining all claims and statements against a respondent licensee, the director shall pay, up to the amount specified in Section 56708, from the products fund to claimants, in accordance with the provisions of this chapter and all the following terms and conditions: (a) The claimants shall have filed a verified complaint with the department. (b) The amount due the claimants has been determined by an audit or investigation by the department, and the amount of the indebtedness has been fully substantiated by the claimant and verified by the director. (c) The amount due is not disputed by the licensee and is approved by the department or, if the claim is disputed or not agreed to by the parties, the claim shall be adjudicated by an administrative hearing and a decision rendered pursuant to Section 55749 or 56447 specifying the amount due the creditors. 56708. The director may only pay up to 50 percent of any claim from the products fund. In no case shall the total paid all the claimants under this chapter exceed fifty thousand dollars ($50,000) against any one licensee. However, if a person subsequently obtains a new license under Chapter 6 (commencing with Section 55401) or Chapter 7 (commencing with Section 56101), claims may be made pursuant to Section 56705 against the products fund due to acts of the licensee made under his or her new license and those claims may be paid up to fifty thousand dollars ($50,000). 56709. No payment shall be made from the products fund by the director on any claim until he determines, to his satisfaction, that all possible recoveries have been made under the provisions of Article 12 (commencing with Section 55741) of Chapter 6 or Article 13 (commencing with Section 56441) of Chapter 7 of this division. 56710. This chapter does not preclude a claimant from bringing any action against the licensee in any court having jurisdiction. 56711. A creditor's claim shall be paid under this chapter only if the claim is based on a transaction with a processor, dealer, broker, or commission merchant who was licensed pursuant to the provisions of Chapter 6 (commencing with Section 55401) or Chapter 7 (commencing with Section 56101) at the time of entering into the contract involved or at the time of delivery of the farm products. In any case where the director has notified the creditor before delivery of the farm product that the license authorizing the contract has been revoked or suspended, or the creditor has independent knowledge thereof, and the creditor thereafter makes delivery of the farm products to the former or suspended licensee, the claim shall be disallowed. In addition, the director may disallow any claim, in whole or in part, upon a finding of lack of good faith in entering into the contract, collusion to violate any provision of Chapter 6 (commencing with Section 55401) or Chapter 7 (commencing with Section 56101), or fraud against the products fund. The provisions of this section shall not be construed to authorize any person subject to this chapter to continue to perform any of the functions of a licensee while the license is revoked or suspended or to release the person whose license has been revoked or suspended from any damages which may accrue to the other party to the contract, or to others, as a result of the legal inability to perform because of the license discipline. 56712. If a payment is made to any creditor from the products fund, the director shall be subrogated to all of the creditor's rights of recovery against any person or organization and the creditor shall execute and deliver to the director such instruments and papers and perform any other acts necessary to carry out the provisions of this section. 56713. In the event any moneys are expended from the products fund on behalf of any licensee, such licensee shall not be licensed in this state for a period of four years from the date such payment is made, so long as the licensee remains legally obligated to pay any claim for farm products made pursuant to Chapter 6 (commencing with Section 55401) or Chapter 7 (commencing with Section 56101), or unless the amount of money expended on the licensee's behalf has been repaid to the products fund and the balance, if any, due creditors plus a penalty assessment of 7 percent per annum from the date such moneys were expended from the products fund or due the creditor have been paid. In case the licensee is a corporation, this section shall apply with respect to any officer, member of the board of directors, or any person employed by such corporation in a managerial position, or any person who owns more than 25 percent of the stock of such corporation. 56714. Any money in the products fund, which the director determines is available for investment, may be invested or reinvested by the State Treasurer in any of the securities which are described in Article 1 (commencing with Section 16430), Chapter 3, Part 2, Division 4, Title 2 of the Government Code, or placed in a bank as provided in Chapter 4 (commencing with Section 16500), Part 2, Division 4, Title 2 of the Government Code, and handled in the same manner as money in the State Treasury. 56715. Any transactions with a licensee made after the licensee has filed bankruptcy shall not be covered under this chapter until the bankruptcy is resolved. A transaction includes, but is not limited to, a contract which provides for multiple deliveries. 56716. Any transactions with a licensee made after a verified complaint has been filed by a claimant due to default by the licensee shall not be covered under this chapter on behalf of that claimant until the complaint is resolved. A transaction includes, but is not limited to, a contract which provides for multiple deliveries. 56717. This chapter shall remain in effect only until the date upon which all of the funds remaining in the products fund have been distributed pursuant to Section 56701.5, and as of that date is repealed, unless a later enacted statute, which is enacted before that date, deletes or extends that date.