Title of Regulation: 2VAC5-350. Rules and Regulations for the Enforcement of the Virginia Commission Merchant Law (amending 2VAC5-350-10 through 2VAC5-350-60, 2VAC5-350-80).

Statutory Authority: § 3.2-4704 of the Code of Virginia.

Effective Date: March 4, 2009.

Agency Contact: Robert E. Bailey, Program Manager, Department of Agriculture and Consumer Services, P.O. Box 1163, Richmond, VA 23218, telephone (804) 786-1274, FAX (804) 786-1571, TTY (800) 828-1120, or email robert.bailey@vdacs.virginia.gov.

Summary:

The amendments update citations to reflect the recodification of Title 3.1 to Title 3.2 of the Code of Virginia, which became effective October 1, 2008.

2VAC5-350-10. Definitions.

The following words and terms, when used in this chapter, shall have the following meaning, meanings unless the context clearly indicates otherwise.

"Buyer bill" means the document generated by the licensee showing the tobacco purchased by each buyer at each sale.

"Check register" means the daily journal that is maintained by the licensee to record each check issued by the warehouse covering tobacco sales.

"Coupon" means any one of the copies of the ticket.

"Long and short" document means the document provided by the buyer showing the adjustment in the bill to reflect tobacco received and paid for by the buyer.

"Ticket" means the document which is used to identify a single sale unit in the auction system.

"Tobacco sale bill" or "Floor sheet" means the document that is used to record the data from the ticket covering the sales transaction of individual sellers.

"Virginia Weights and Measure Law" means regulations promulgated under the requirements of Chapter 35 56 (§ 3.1-919 3.2-5600 et seq.) of Title 3.1 3.2 of the Code of Virginia.

2VAC5-350-20. Applicability.

This chapter shall apply to tobacco auction warehouses licensed under the Commission Merchants Law, Article 2 (§ 3.1-692 et seq.) of Chapter 26 Chapter 47 (§ 3.2-4709 et seq.) of Title 3.1 3.2 of the Code of Virginia.

2VAC5-350-30. Records to be kept.

A. For the purpose of complying with § 3.1-713(h) 3.2-4729 (8) of the Code of Virginia, and in order to give a true account of sales as required in § 3.1-709(c) 3.2-4724 (3) of the Code of Virginia, the following records shall be kept by the licensee and made available for inspection by the Commissioner commissioner. This does not preclude the inclusion of other information needed by the licensee or others:

1. Sequentially numbered tickets covering sales transactions. A sale transaction is defined as a transaction appearing on the tobacco sales bill for which the seller received payment.

2. Preprinted sequentially numbered tobacco sale bills, including voided tobacco sale bills.

3. Check registers.

4. Buyer bills or recap sheet of buyers bills.

5. Long and short documents.

B. The licensee shall accurately record on the ticket:

1. Seller identification. (Grower's name or crop number.)

2. Warehouse number or name.

3. Ticket number - preprinted sequential numbers meet this requirement for flue-cured. Sale bill number plus line number suffix and basket number meets this requirement for burley.

4. Tobacco sale bill number.

5. Date of weighing.

6. Net weight.

7. Buyer.

8. Price.

And provide space for the USDA inspector to record:

9. USDA grade.

10. Date of grading.

11. Grader identification.

C. The licensee shall accurately record on the tobacco sale bill:

1. Tobacco sale bill number - preprinted sequential numbers meet this requirement.

2. Sale date.

3. Seller identification.

4. Warehouse identification.

5. The following information for each ticket covered by the tobacco sale bill:

a. Ticket number or basket number.

b. Buyer.

c. Net weight.

d. Price per pound.

e. Sale extension - amount.

6. Warehouse charges.

7. Excise tax deduction.

8. Amount paid seller.

D. The licensee shall accurately record in the check register or other comparable record the following information:

1. Check number.

2. Date of issue.

3. Tobacco sale bill number.

4. Amount paid.

E. The licensee shall accurately record the following information on the buyer bill for each sale unit purchased by the buyer:

1. Ticket or basket number.

2. Net weight.

3. Price.

4. Tobacco sale extension - amount.

2VAC5-350-40. Accountability for alterations to records.

A. Alterations. Section 3.1-713(h) 3.2-4729 (8) of the Code of Virginia requires that "any record which is altered in any fashion must bear the full signature of the person authorized to make, and who is responsible for, the alteration." For the purpose of this chapter, alterations to such records shall apply only to tickets and tobacco sale bills. Such alterations made by the warehouse owner, operator, ticket marker, or bookkeeper may be identified by their initials, provided that their full signature and the initials to be used are posted in the tobacco warehouse office.

1. Ticket. Alterations to the ticket shall apply only to the weight, buyer, or price; and shall have the full signature or initials permitted in this subsection of the person authorized to make, and who is responsible for, the alteration.

2. Tobacco sale bill. Alterations on tobacco sale bills shall apply only to the weight, buyer, price, or total net amount due to the seller; and shall have the full signature or initials permitted in this subsection of the person authorized to make, and who is responsible for, the alteration.

B. Full signature. For the purpose of § 3.1-713(h) 3.2-4729 (8) of the Code of Virginia and this chapter, the following examples are considered full signatures:

(1) 1. John Henry Jones

(2) 2. John H. Jones

(3) 3. John Jones

(4) 4. J.H. Jones

(5) 5. J. Jones

2VAC5-350-50. Sales rejected by the seller.

For the purpose of meeting the requirements of § 3.1-713(h) 3.2-4729 (8) of the Code of Virginia, any record which that is altered because of a rejected sale by the seller shall be so indicated on the tobacco sale bill by the word "rejected," or the letter "R," and properly initialed as permitted by subsection A of 2VAC5-350-40. The rejected sale ticket or coupon is not required to be kept.

2VAC5-350-60. Authorization from consignor for licensee to buy tobacco for his own account except during auction.

For the purpose of § 3.1-718(e) 3.2-4737 (5) of the Code of Virginia, prior authority from the consignor in writing is required only when the licensee purchases the tobacco for his own account except at auction. Where prior written authority has not been obtained from the consignor, a telephone conversation or other oral authorization by the consignor permitting the licensee to buy his tobacco for his own account shall be permitted, provided that written authorization is given by the consignor signing the ticket or other appropriate statement before a final sale is consummated.

The licensee does not need written authorization to act in behalf of a producer by rejecting a sale and making disposition of the tobacco in accordance with 2VAC5-350-80 as follows:

1. Holding for resale at auction.

2. Reselling to the original buyer at a higher price.

3. Reselling to another buyer at the same or a higher price.

2VAC5-350-80. Alterations to tickets and tobacco sales bills.

Alterations to weight, buyer, price, or total amount due the producer may be made by persons authorized to make, and who are responsible for, such alterations under the following conditions and requirements:

1. Weight on ticket. Only persons authorized by 2VAC5-340-190 may alter weights on tickets. Changes shall be initialed as provided in 2VAC5-340-190.

2. Buyer or price on ticket during auction. As long as the auctioneer controls the sale, the ticket marker is authorized to make, and is responsible for, alterations on the ticket as to the buyer or price. Changes must be initialed by the ticket marker.

3. Buyer or price on ticket after auction. When the auctioneer is no longer in control of the sale, alterations on the ticket as to the buyer or price may be made by the person outlined below with signature as indicated:

a. When the producer rejects a sale, the following disposition of the sales unit may be made:

(1) Producer may hold for resale - no signature required.

(2) Producer may sell to original buyer at a higher price. The original buyer must sign the ticket.

(3) Producer may sell to another buyer. The producer and the new buyer must sign the ticket.

b. When the original buyer finds a sale unit to be objectionable, the following disposition of the sale unit may be made:

(1) The original buyer may sell the sale unit to another buyer who may be the licensee. Both the original buyer and the new buyer, including the licensee if he is the new buyer, must sign the ticket; or

(2) In the event the sale unit is found to be nested, unsound or unsafe, or contains foreign matter or inferior tobacco to the extent that the quality of the sale unit is significantly lowered, the buyer may ask for a reinspection by the USDA grader. If the sale unit is determined by the grader to be of lower quality, the buyer may reject the sale unit, which would then be held by the licensee for disposition by the seller. The original buyer must sign the ticket.

c. When the licensee rejects a sale on behalf of a producer, the following disposition of the sale unit may be made:

(1) Without written authorization from the producer, as required in § 3.1-718(e) 3.2-4737 (5) of the Code of Virginia to buy tobacco for his own account, the licensee:

(a) May hold for future sale.

(b) May resell to the original buyer at a higher price. The original buyer must sign the price alteration.

(c) May sell to another buyer, other than himself. The original buyer must sign to release the sales unit, and the new buyer must sign to accept the sales unit.

(2) With written authorization from the producer, as required by § 3.1-718(e) 3.2-4737 (5) of the Code of Virginia to buy tobacco for his own account, the licensee may, in addition to the options listed in paragraph subdivision c (1) above, reject the sale and purchase the tobacco for his own account, provided that the licensee signs the ticket.