SB-1211, As Passed House, June 30, 2004                                     

SUBSTITUTE FOR

SENATE BILL NO. 1211

                                                                             A bill to amend 1937 PA 284, entitled                                             

"An act to prevent the spread of infectious and contagious                  

diseases of livestock; to require persons, associations,                    

partnerships and corporations engaged in the buying, receiving,             

selling, transporting, exchanging, negotiating, or soliciting               

sale, resale, exchange or transportation of livestock to be                 

licensed and bonded by the department of agriculture; to keep a             

producers' proceeds account; to provide for the refusal,                    

suspension or revocation of such licenses; to provide for                   

weighmasters; to provide for the inspection and disinfection of             

yards, premises and vehicles; and to provide penalties for the              

violation of this act,"                                                     

by amending section 3 (MCL 287.123), as amended by 2003 PA 85.              

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

1       Sec. 3.  (1) A person desiring to act as a dealer, broker,                  

2   or agent shall file an application with the department for a                

3   license to engage in  that the business of dealer, broker, or              

4   agent.  The application shall state the nature of the business,             

5   the  post-office mailing address of the applicant, and the                 

6   post-office mailing address at or from which the business is to           

1   be conducted.  If the applicant desires to operate a livestock              

2   yard where livestock is kept and sold at public or private sale,            

3   the application shall so state.  The application may state                  

4   additional information as requested by the director.                        

5       (2)  Beginning Subject to subsection (5) and beginning

6   October 1, 2003 through September 30, 2007, the  departments

7   department shall charge and collect the following fees for                  

8   initial and renewal license applications, which shall be                    

9   deposited into the general fund:                                            

10       (a) Class I (livestock auction).................... $400.00.           

11       (b) Class II (collection point/buying station)..... $250.00.           

12       (c) Class III (horse auction)...................... $150.00.           

13       (d) Class IV (dealer/broker/agent).................. $50.00.           

14      (3)  Through Subject to subsection (5) and through

15  September 30, 2003 or after September 30, 2007, the only fee the            

16  department shall charge and collect for the issuance and renewal            

17  of licenses under this section is a fee of $5.00 for a dealer,              

18  broker, or agent license.                                                   

19      (4) A licensee who buys or sells livestock by weight shall                  

20  employ a registered weighmaster to do all the weighing.  The                

21  duties, qualifications, and requirements for registration of                

22  weighmasters shall be established by the director by promulgation           

23  of a rule under section 9.                                                  

24  (5) Beginning the effective date of the amendatory act that                 

25  added this subsection, the department shall issue an initial or             

26  renewal dealer, broker, agent, livestock auction, collecting                

27  point/buying station, and horse auction license not later than 90           

1   days after the applicant files a completed application.  Receipt            

2   of the application is considered the date the application is                

3   received by any agency or department of the state of Michigan.              

4   If the application is considered incomplete by the department,              

5   the department shall notify the applicant in writing, or make the           

6   information electronically available, within 30 days after                  

7   receipt of the incomplete application, describing the deficiency            

8   and requesting the additional information.  The 90-day period is            

9   tolled upon notification by the department of a deficiency until            

10  the date the requested information is received by the                       

11  department.  The determination of the completeness of an                    

12  application does not operate as an approval of the application              

13  for the license and does not confer eligibility of an applicant             

14  determined otherwise ineligible for issuance of a license.                  

15      (6) If the department fails to issue or deny a license within               

16  the time required by this section, the department shall return              

17  the license fee and shall reduce the license fee for the                    

18  applicant's next renewal application, if any, by 15%.  The                  

19  failure to issue a license within the time required under this              

20  subsection does not allow the department to otherwise delay the             

21  processing of the application, and that application, upon                   

22  completion, shall be placed in sequence with other completed                

23  applications received at that same time.  The department shall              

24  not discriminate against an applicant in the processing of the              

25  application based upon the fact that the license fee was refunded           

26  or discounted under this subsection.                                        

27      (7) Beginning October 1, 2005, the director shall submit a                  

1   report by December 1 of each year to the standing committees and            

2   appropriations subcommittees of the senate and house of                     

3   representatives concerned with agriculture issues.  The director            

4   shall include all of the following information in the report                

5   concerning the preceding fiscal year:                                       

6       (a) The number of initial and renewal applications the                      

7   department received and completed within the 90-day time period             

8   described in subsection (5).                                                

9       (b) The number of applications denied.                                      

10      (c) The number of applicants not issued a license within the                

11  90-day time period and the amount of money returned to licensees            

12  and registrants under subsection (6).

13  (8)  (5)  The application for that license and bond shall be                

14  submitted to the director on or before October 1 of each year.              

15  Each license issued under this section shall be for a period of 1           

16  year commencing October 1 and ending the following September 30.            

17  (9)  (6)  Each dealer, broker, or agent operating or                        

18  conducting a livestock auction shall file with his or her                   

19  application for a license a surety bond effective during the                

20  period for which the license is issued.  The surety bond shall be           

21  issued by a surety company registered in this state to indemnify            

22  persons from whom livestock is purchased or for whom livestock is           

23  sold or other security and in such amounts, form, and sufficiency           

24  as approved by the director.  The amount of the bond shall be an            

25  amount equal to the amount of gross dollar volume of livestock              

26  business conducted during the average week of the previous                  

27  licensing year by the applicant, but in no case less than                   

1   $1,500.00.  If the average gross weekly livestock business                  

2   conducted by the applicant during the previous licensing year was           

3   greater than $25,000.00, the bond shall be increased above                  

4   $25,000.00, at the rate of $1,000.00 for each $5,000.00 or part             

5   thereof above $25,000.00 on the average gross dollar-volume of              

6   weekly livestock business conducted during the previous year.  A            

7   licensee who owns or operates more than 1 livestock yard or                 

8   livestock auction may file 1 bond in an amount determined by the            

9   formula described in this subsection.  Any dealer, broker, or               

10  agent operating or conducting a livestock yard or livestock                 

11  auction who has filed a surety bond for the livestock yard or               

12  livestock auction and indemnifies persons from whom livestock is            

13  purchased or for whom livestock is sold in accordance with the              

14  terms of any federal act is exempt from the bonding requirements            

15  of this subsection provided the bond is equivalent in amount to             

16  that which would be required by this act.  The bond shall be for            

17  a  livestock  dealer or broker and his or her agents in which the           

18  department is the obligee for the benefit and purpose of                    

19  protecting all persons selling or consigning livestock to the               

20  licensed dealer, broker, or agent against the licensed dealer's,            

21  broker's, or agent's failure to pay amounts due on livestock                

22  purchased by or consigned to them.                                          

23  (10)  (7)  Each licensee shall keep records and shall                       

24  furnish, upon request, information concerning his or her                    

25  purchases and sales as may be required by the director for the              

26  purpose of establishing the amount of bond required under                   

27  subsection  (6) (9).  The director, in fixing the amount of the            

1   bond, shall take into consideration the dollar volume of                    

2   livestock business and other information furnished by the                   

3   livestock  dealer, broker, or his or her agent.  If a dealer,              

4   broker, or agent did not operate a livestock auction the previous           

5   licensing year, the bond shall be for an amount as shall be                 

6   established by the director after consideration of all                      

7   information available on the probable weekly gross dollar volume            

8   of business to be conducted by the dealer, broker, or agent                 

9   during the licensing year.                                                  

10  (11)  (8)  If during any licensing year the bond filed by any               

11  licensee becomes less than required by this act because of an               

12  increase in gross dollar volume of livestock sales, the director            

13  may issue an order requiring the licensee to file an additional             

14  bond to cover the increase in gross dollar volume of livestock              

15  sales.  Failure to comply with the orders of the director is                

16  grounds for suspension or revocation of license.  A bond shall be           

17  conditioned upon the faithful performance of the licensee's                 

18  duties as a dealer or broker and on the provisions of law                   

19  relating to the purchase of livestock by the  livestock  dealer             

20  or broker and for the payment by the  livestock  dealer or broker

21  of all livestock purchased by or consigned to the  livestock

22  dealer or broker as a dealer or broker in livestock.                        

23  (12)  (9)  A license issued under this section allows the                   

24  holder to conduct the business of dealer or broker at or from the           

25  place named in the application.  A legal entity engaged in the              

26  business of transporting livestock or negotiating or soliciting             

27  the transportation or transfer of livestock that is not engaged             

1   in the buying, selling, reselling, exchanging, negotiating, or              

2   soliciting the sale, resale, or exchange of livestock must obtain           

3   a license under this section but is not required to comply with             

4   bonding provisions of this section.                                         

5   (13)  (10)  A dealer, broker, or agent shall keep adequate                  

6   records of the producers' proceeds account in compliance with               

7   section 3a and of all sales and purchases for a period of 2 years           

8   in the manner required by the director.  The records shall be               

9   open to reasonable inspection by the department.                            

10  (14)  (11)  A dealer, broker, or agent shall notify the                     

11  director of a change of address within 5 days after that change.            

12  Any change in ownership of any livestock auction or market shall            

13  be reported to the director within 5 days by the licensee.  Each            

14  dealer or broker shall file with the director on January 1 of               

15  each year a sworn statement of average weekly sales and a                   

16  statement showing the number and kinds of livestock purchased and           

17  sold during the previous year.                                              

18  (15) As used in this section, "completed application" means                 

19  an application complete on its face and submitted with any                  

20  applicable licensing fees as well as any other information,                 

21  records, approval, security, or similar item required by law or             

22  rule from a local unit of government, a federal agency, or a                

23  private entity but not from another department or agency of the             

24  state of Michigan.