§ 499d. — Issuance of license.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 7USC499d]
TITLE 7--AGRICULTURE
CHAPTER 20A--PERISHABLE AGRICULTURAL COMMODITIES
Sec. 499d. Issuance of license
(a) Authority to do business; termination; renewal
Whenever an applicant has paid the prescribed fee the Secretary,
except as provided elsewhere in this chapter, shall issue to such
applicant a license, which shall entitle the licensee to do business as
a commission merchant and/or dealer and/or broker unless and until it is
suspended or revoked by the Secretary in accordance with the provisions
of this chapter, or is automatically suspended under section 499g(d) of
this title, but said license shall automatically terminate on the
anniversary date of the license at the end of the annual or multiyear
period covered by the license fee unless the licensee submits the
required renewal application and pays the applicable renewal fee (if
such fee is required): Provided, That notice of the necessity of
renewing the license and of paying the renewal fee (if such fee is
required) shall be mailed at least thirty days before the anniversary
date: Provided, further, That if the renewal fee (if required) is not
paid by the anniversary date the licensee may obtain a renewal of that
license at any time within thirty days by paying the fee provided in
section 499c(b) of this title, plus $50, which shall be deposited in the
Perishable Agricultural Commodities Act fund provided for by section
499c(b) of this title: And provided further, That the license of any
licensee shall terminate upon said licensee, or in case the licensee is
a partnership, any partner, being discharged as a bankrupt, unless the
Secretary finds upon examination of the circumstances of such
bankruptcy, which he shall examine if requested to do so by said
licensee, that such circumstances do not warrant such termination.
(b) Refusal of license; grounds
The Secretary shall refuse to issue a license to an applicant if he
finds that the applicant, or any person responsibly connected with the
applicant, is prohibited from employment with a licensee under section
499h(b) of this title or is a person who, or is or was responsibly
connected with a person who--
(A) has had his license revoked under the provisions of section
499h of this title within two years prior to the date of the
application or whose license is currently under suspension;
(B) within two years prior to the date of application has been
found after notice and opportunity for hearing to have committed any
flagrant or repeated violation of section 499b of this title, but
this provision shall not apply to any case in which the license of
the person found to have committed such violation was suspended and
the suspension period has expired or is not in effect;
(C) within two years prior to the date of the application, has
been found guilty in a Federal court of having violated the
provisions of sections 491, 493 to 497 of this title, relating to
the prevention of destruction and dumping of farm produce; or
(D) has failed, except in the case of bankruptcy and subject to
his right of appeal under section 499g(c) of this title, to pay any
reparation order issued against him within two years prior to the
date of the application.
(c) Issuance of license upon furnishing bond; issuance after three years
without bond; effect of termination of bond; increase or
decrease in amount; payment of increase
An applicant ineligible for a license by reason of the provisions of
subsection (b) of this section may, upon the expiration of the two-year
period applicable to him, be issued a license by the Secretary if such
applicant furnishes a surety bond in the form and amount satisfactory to
the Secretary as assurance that his business will be conducted in
accordance with this chapter and that he will pay all reparation orders
which may be issued against him in connection with transactions
occurring within four years following the issuance of the license,
subject to his right of appeal under section 499g(c) of this title. In
the event such applicant does not furnish such a surety bond, the
Secretary shall not issue a license to him until three years have
elapsed after the date of the applicable order of the Secretary or
decision of the court on appeal. If the surety bond so furnished is
terminated for any reason without the approval of the Secretary the
license shall be automatically canceled as of the date of such
termination and no new license shall be issued to such person during the
four-year period without a new surety bond covering the remainder of
such period. The Secretary, based on changes in the nature and volume of
business conducted by a bonded licensee, may require an increase or
authorize a reduction in the amount of the bond. A bonded licensee who
is notified by the Secretary to provide a bond in an increased amount
shall do so within a reasonable time to be specified by the Secretary,
and upon failure of the licensee to provide such bond his license shall
be automatically suspended until such bond is provided. The Secretary
may not issue a license to an applicant under this subsection if the
applicant or any person responsibly connected with the applicant is
prohibited from employment with a licensee under section 499h(b) of this
title.
(d) Withholding license pending investigation
The Secretary may withhold the issuance of a license to an
applicant, for a period not to exceed thirty days pending an
investigation, for the purpose of determining (a) whether the applicant
is unfit to engage in the business of a commission merchant, dealer, or
broker because the applicant, or in case the applicant is a partnership,
any general partner, or in case the applicant is a corporation, any
officer or holder of more than 10 per centum of the stock, prior to the
date of the filing of the application engaged in any practice of the
character prohibited by this chapter or was convicted of a felony in any
State or Federal court, or (b) whether the application contains any
materially false or misleading statement or involves any
misrepresentation, concealment, or withholding of facts respecting any
violation of the chapter by any officer, agent, or employee of the
applicant. If after investigation the Secretary believes that the
applicant should be refused a license, the applicant shall be given an
opportunity for hearing within sixty days from the date of the
application to show cause why the license should not be refused. If
after the hearing the Secretary finds that the applicant is unfit to
engage in the business of a commission merchant, dealer, or broker
because the applicant, or in case the applicant is a partnership, any
general partner, or in case the applicant is a corporation, any officer
or holder of more than 10 per centum of the stock, prior to the date of
the filing of the application engaged in any practice of the character
prohibited by this chapter or was convicted of a felony in any State or
Federal court, or because the application contains a materially false or
misleading statement made by the applicant or by its representative on
its behalf, or involves a misrepresentation, concealment, or withholding
of facts respecting any violation of the chapter by any officer, agent,
or employee, the Secretary may refuse to issue a license to the
applicant.
(e) Refusal of license
The Secretary may refuse to issue a license to an applicant if he
finds that the applicant, or in case the applicant is a partnership, any
general partner, or in case the applicant is a corporation, any officer
or holder of more than 10 per centum of the stock, has, within three
years prior to the date of the application, been adjudicated or
discharged as a bankrupt, or was a general partner of a partnership or
officer or holder of more than 10 per centum of the stock of a
corporation adjudicated or discharged as a bankrupt, and if he finds
that the circumstances of such bankruptcy warrant such a refusal, unless
the applicant furnishes a bond of such nature and amount as may be
determined by the Secretary or other assurance satisfactory to the
Secretary that the business of the applicant will be conducted in
accordance with this chapter.
(June 10, 1930, ch. 436, Sec. 4, 46 Stat. 533; Apr. 13, 1934, ch. 120,
Secs. 4-7, 48 Stat. 585, 586; June 19, 1936, ch. 602, Sec. 2, 49 Stat.
1533; Aug. 20, 1937, ch. 719, Sec. 6, 50 Stat. 726; June 15, 1950, ch.
254, Sec. 2, 64 Stat. 218; July 30, 1956, ch. 786, Secs. 2(b), 3, 4, 70
Stat. 726; Pub. L. 87-725, Secs. 5-7, Oct. 1, 1962, 76 Stat. 674; Pub.
L. 95-598, title III, Sec. 303, Nov. 6, 1978, 92 Stat. 2673; Pub. L.
102-237, title X, Sec. 1011(2), Dec. 13, 1991, 105 Stat. 1898; Pub. L.
104-48, Secs. 4(c), 5(b), 12(c), Nov. 15, 1995, 109 Stat. 427, 431.)
Codification
Section was formerly classified to section 554 of this title.
Amendments
1995--Subsec. (a). Pub. L. 104-48, Secs. 4(c), 5(b), substituted
``the anniversary date of the license at the end of the annual or
multiyear period covered by the license fee unless the licensee submits
the required renewal application and pays the applicable renewal fee (if
such fee is required)'' for ``any anniversary date thereof unless the
annual fee has been paid'' in provisions before first proviso, ``the
necessity of renewing the license and of paying the renewal fee (if such
fee is required)'' for ``the necessity of paying the annual fee'' in
first proviso and ``renewal fee (if required)'' for ``annual fee'' and
``plus $50'' for ``plus $5'' in second proviso.
Subsec. (b). Pub. L. 104-48, Sec. 12(c)(1), inserted ``is prohibited
from employment with a licensee under section 499h(b) of this title or''
after ``with the applicant,'' in introductory provisions.
Subsec. (c). Pub. L. 104-48, Sec. 12(c)(2), inserted at end ``The
Secretary may not issue a license to an applicant under this subsection
if the applicant or any person responsibly connected with the applicant
is prohibited from employment with a licensee under section 499h(b) of
this title.''
1991--Subsec. (a). Pub. L. 102-237 substituted ``annual'' for
``anual'' before ``fee has been paid''.
1978--Subsec. (a). Pub. L. 95-598, Sec. 303(a), inserted ``, unless
the Secretary finds upon examination of the circumstances of such
bankruptcy, which he shall examine if requested to do so by said
licensee, that such circumstances do not warrant such termination''.
Subsec. (e). Pub. L. 95-598, Sec. 303(b), inserted ``and if he finds
that the circumstances of such bankruptcy warrant such a refusal,''.
1962--Subsec. (a). Pub. L. 87-725, Sec. 5, inserted proviso that the
license of any licensee shall terminate, if he, or in case the licensee
is a partnership, any partner, is discharged as a bankrupt.
Subsec. (b). Pub. L. 87-725, Sec. 6, amended subsection generally,
and among other changes, required refusal of a license upon showing
responsible connection by the applicant, or by any person responsibly
connected with him, with a person guilty of the specified conduct,
without requiring that the applicant was responsible in whole or in part
for such conduct, and upon the grounds specified in clause (C) relating
to being found guilty in a Federal court of having violated the
provisions of sections 491, 493 to 497 of this title, provided that the
provisions regarding flagrant or repeated violation of section 499b of
this title shall not apply where the license in such case was suspended
and the suspension period has expired or is not in effect, and
eliminated provisions which, notwithstanding the grounds for refusal
specified in the section, permitted the Secretary to issue a license
upon the applicant furnishing a bond or other satisfactory assurance
that his business would be conducted in accordance with this chapter,
and that he would pay reparation orders previously issued against him or
which could be issued against him within two years after receiving the
license, but such license could not be issued until after the expiration
of one year from the revocation or from the finding that the applicant
was responsible, for any flagrant or repeated violation of section 499b
of this title.
Subsec. (c). Pub. L. 87-725, Sec. 7, substituted provisions which
permit a license to be issued to an applicant ineligible under subsec.
(b) of this section, upon expiration of the two year period applicable
to him, if he furnishes a surety bond as assurance that his business
will be conducted in accordance with this chapter and that he will pay
all reparation orders issued against him in connection with transactions
occurring within four years following issuance of license, subject to
appeal under section 499g(c) of this title, or if no bond is given,
permit issuance of the license after three years from the applicable
order, or decision of the court on appeal, and which provide that if a
bond is terminated without the Secretary's approval, the license is
automatically canceled and cannot be re-issued during the four year
period without a new bond, that the Secretary may order an increase or a
reduction in the bond, and that a licensee notified to increase the bond
must do so in a reasonable time or his license will be suspended until
such bond is provided, for provisions which required the Secretary to
refuse a license to an applicant, or if the applicant was a partnership,
or an association or a corporation, to a partner or officer or any
person holding a responsible position therein, respectively, found
within two years of being guilty of violating sections 491 to 497 or
499n(b) of this title.
1956--Subsec. (a). Act July 30, 1956, Sec. 2(b), substituted ``the
fee provided in section 499c(b) of this title, plus $5'' for ``a fee of
$20''.
Subsec. (d). Act July 30, 1956, Sec. 3, included within term
``applicant'' any general partner of a partnership, and officers or
holders of more than 10 per centum of the stock of a corporation, and
permitted the Secretary to refuse to issue a license to an applicant who
was convicted of a felony in any State or Federal court.
Subsec. (e). Act July 30, 1956, Sec. 4, added subsec. (e).
1950--Subsec. (a). Act June 15, 1950, increased fee for late
registration from $15 to $20, and provided for its disposition in the
fund.
1937--Subsec. (a). Act Aug. 20, 1937, inserted first and second
provisos.
Subsec. (b). Act Aug. 20, 1937, among other changes, inserted ``Such
bond shall be in an amount sufficient in the judgment of the Secretary
of Agriculture to insure payment of such reparation orders'' at the end.
Subsecs. (c), (d). Act Aug. 20, 1937, amended subsecs. (c) and (d)
generally.
1936--Subsec. (b). Act June 19, 1936, among other changes, inserted
``if he finds'' after ``or (3)'' and ``or (5)'' after ``section 499b''.
1934--Subsec. (b). Act Apr. 13, 1934, Sec. 4, among other changes,
added cls. (3) and (4).
Subsecs. (c) to (e). Act Apr. 13, 1934, Secs. 5-7, added subsecs.
(c) to (e).
Effective Date of 1978 Amendment
Amendment by Pub. L. 95-598 effective Oct. 1, 1979, see section
402(a) of Pub. L. 95-598, set out as an Effective Date note preceding
section 101 of Title 11, Bankruptcy.
Section Referred to in Other Sections
This section is referred to in section 499h of this title.
