---
kind: "section"
citation: "7 U.S.C. § 217b"
title: "7"
title_heading: "Agriculture"
number: "217b"
heading: "Statutory trust established; dealer"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/7/217b"
units:
  - "Chapter 9 — Packers and Stockyards"
  - "Subchapter III — Stockyards and Stockyard Dealers"
---

# §217b. Statutory trust established; dealer

- (a) **Establishment—**
  - (1) **In general—** All [livestock](/usc/7/182.md?p=4) purchased by a [dealer](/usc/7/201.md?p=d) in cash sales and all inventories of, or receivables or proceeds from, such [livestock](/usc/7/182.md?p=4) shall be held by such [dealer](/usc/7/201.md?p=d) in trust for the benefit of all unpaid cash sellers of such [livestock](/usc/7/182.md?p=4) until full payment has been received by such unpaid cash sellers.
  - (2) **Exemption—** Any [dealer](/usc/7/201.md?p=d) whose average annual purchases of [livestock](/usc/7/182.md?p=4) do not exceed $100,000 shall be exempt from the provisions of this section.
  - (3) **Effect of dishonored instruments—** For purposes of determining full payment under [paragraph (1)](#a-1), a payment to an unpaid cash seller shall not be considered to have been made if the unpaid cash seller receives a payment instrument that is dishonored.
- (b) **Preservation of trust—** An unpaid cash seller shall lose the benefit of a trust under [subsection (a)](#a) if the unpaid cash seller has not preserved the trust by giving written notice to the [dealer](/usc/7/201.md?p=d) involved and filing such notice with the [Secretary](/usc/7/182.md?p=2)—
  - (1) within 30 days of the final date for making a payment under [section 228b of this title](/usc/7/228b.md) in the event that a payment instrument has not been received; or
  - (2) within 15 business days after the date on which the seller receives notice that the payment instrument promptly presented for payment has been dishonored.
- (c) **Notice to lien holders—** When a [dealer](/usc/7/201.md?p=d) receives notice under [subsection (b)](#b) of the unpaid cash seller’s intent to preserve the benefits of the trust, the [dealer](/usc/7/201.md?p=d) shall, within 15 business days, give notice to all [persons](/usc/7/182.md?p=1) who have recorded a [security](/usc/7/24.md?p=b) interest in, or lien on, the [livestock](/usc/7/182.md?p=4) held in such trust.
- (d) **Cash sales defined—** For the purpose of this section, a cash sale means a sale in which the seller does not expressly extend credit to the buyer.
- (e) **Purchase of livestock subject to trust—**
  - (1) **In general—** A [person](/usc/7/182.md?p=1) purchasing [livestock](/usc/7/182.md?p=4) subject to a [dealer](/usc/7/201.md?p=d) trust shall receive good title to the [livestock](/usc/7/182.md?p=4) if the [person](/usc/7/182.md?p=1) receives the [livestock](/usc/7/182.md?p=4)—
    - (A) in exchange for payment of new value; and
    - (B) in good faith without notice that the transfer is a breach of trust.
  - (2) **Dishonored payment instrument—** Payment shall not be considered to have been made if a payment instrument given in exchange for the [livestock](/usc/7/182.md?p=4) is dishonored.
  - (3) **Transfer in satisfaction of antecedent debt—** A transfer of [livestock](/usc/7/182.md?p=4) subject to a [dealer](/usc/7/201.md?p=d) trust is not for value if the transfer is in satisfaction of an antecedent debt or to a secured party pursuant to a [security](/usc/7/24.md?p=b) agreement.
- (f) **Enforcement—** Whenever the [Secretary](/usc/7/182.md?p=2) has reason to believe that a [dealer](/usc/7/201.md?p=d) subject to this section has failed to perform the duties required by this section or whenever the [Secretary](/usc/7/182.md?p=2) has reason to believe that it will be in the best interest of unpaid cash sellers, the [Secretary](/usc/7/182.md?p=2) shall do one or more of the following—
  - (1) appoint an independent trustee to carry out the duties required by this section, preserve trust assets, and enforce the trust;
  - (2) serve as independent trustee, preserve trust assets, and enforce the trust; or
  - (3) file suit in the United States district court for the district in which the [dealer](/usc/7/201.md?p=d) resides to enjoin the [dealer](/usc/7/201.md?p=d)’s failure to perform the duties required by this section, preserve trust assets, and to enforce the trust. Attorneys employed by the [Secretary](/usc/7/182.md?p=2) may, with the approval of the Attorney General, represent the [Secretary](/usc/7/182.md?p=2) in any such suit. Nothing herein shall preclude unpaid sellers from filing suit to preserve or enforce the trust.

## Source credit

(Aug. 15, 1921, ch. 64, title III, § 318, as added Pub. L. 116–260, div. N, title VII, § 763, Dec. 27, 2020, 134 Stat. 2114.)