CHAPTER 4.1-27 LIVESTOCK AUCTION MARKETS 4.1-27-01. Definitions

In this chapter, unless the context or subject matter otherwise requires: 1

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"Commissioner" means the agriculture commissioner

"Livestock" means horses, mules, asses, bison, cattle, swine, sheep, farmed elk, and goats

"Livestock auction market" means a place or establishment conducted or operated for compensation or profit as a public market or a private buying station, consisting of pens or other enclosures and their appurtenances; in which livestock is received, held, or kept for sale; and where that livestock is sold or offered for sale, at either public auction or private sale

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4.1-27-02. Premises excluded from application of chapter

The provisions of this chapter do not apply to: 1

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Any place used solely for the dispersal sale of the livestock of a farmer, dairy producer, livestock breeder, or feeder who is discontinuing the person's business

The premises of any butcher, packer, or processor who receives animals exclusively for immediate slaughter

Any place where any individual or duly constituted association of breeders of livestock of any class assembles and offers for sale and sells under the individual's or association's management registered livestock or breeding sires owned by the individual or members of the association if the individual or association: a

Assumes all responsibility of the sale; b. Guarantees title of the livestock; and c. Makes proper provision for the inspection of all animals sold

Any place where a duly constituted association of breeders of livestock of any class assembles and offers for sale and sells under its management, at an annual production sale not exceeding twenty-one calendar days, livestock raised or held for at least one year by producers affiliated with the association, if the association: Assumes all responsibility of the sale; a

b. Guarantees title of the livestock; and c. Makes proper provision for the inspection of all animals sold

4.1-27-03. License requirements - Application - Fee - Commission schedule - Facilities

A person may not establish or operate a livestock auction market within this state without procuring a license to do so from the commissioner. The commissioner may not approve any application without written permission from the state veterinarian. An applicant for a license shall: 3

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1. Make a written application in the form prescribed by the commissioner; 2

File evidence required by the state board of animal health or the commissioner to show the person is financially responsible to operate an auction market and the person will own or control adequate facilities for the care, sorting, feeding, loading and unloading, and shipment of livestock; Pay to the commissioner a license fee of two hundred dollars; File with the commissioner a schedule of fees and commissions that will be charged to owners, sellers, or their agents. The schedule must be posted conspicuously at the auction market. The schedule may not be altered except upon notification to the commissioner. The altered schedule must be reposted upon notification to the commissioner; State the location where the applicant proposes to operate a livestock auction market; 5

6. Make a complete and detailed description of the property and facilities proposed to be used in connection with the livestock auction market; and Page No. 1 Conditions - Exemptions

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7. Make a showing of public convenience and necessity to the satisfaction of the commissioner

4.1-27-04. Bond to accompany application for license - Amount - Approval - An applicant for a license to operate a livestock auction market shall file a surety bond of at least ten thousand dollars with the application for license or renewal of a license. The bond must be approved by the commissioner as to the amount, form, and surety. The commissioner must be named the obligee in the bond. The bond must be for the benefit of, and for the purpose of protecting, any person selling to or through the licensed livestock auction market, or buying livestock through or from the licensed livestock auction market or the licensee's agent. The commissioner may require an additional bond of the licensee when the commissioner deems the volume of the business of the licensee warrants the additional bond. The bond must be conditioned for: a

The payment of all money received by the licensee and the operator of the livestock auction market, less reasonable expenses and agreed commissions; The faithful performance by the licensee of the duties of a livestock auction market operator; and The faithful performance by the licensee of all duties imposed by law relating to the purchase, sale, or holding of livestock

The bond must cover the entire license period. If the commissioner is the trustee or obligee of a surety bond in which the auction market operator is the principal and is operating and is bonded under the Packers and Stockyards Act, 1921 [Pub. L. 67-51; 42 Stat. 159; 7 U.S.C. 181 et seq.], the commissioner may accept that bond in lieu of the one required under this section, except that the minimum bond requirements of ten thousand dollars will be continued

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4.1-27-05. Records release required with application for licensure

A livestock auction market shall file with the license application a release in a form approved by the commissioner authorizing the commissioner to access financial records of the livestock auction market held by financial institutions, accountants, and other sources. The commissioner may use the release in the course of licensing or relicensing a livestock auction market or in the course of an investigation of a livestock auction market. Any information gained through the use of a release is confidential. The commissioner may furnish information obtained through the use of the records release to the attorney general, other state agencies, and any prosecuting officials requiring the information for use in pursuit of official duties

4.1-27-06. Expiration and renewal of license - Fee returned upon failure to issue or renew license

Each license issued under this chapter expires on the thirty-first day of March following the date of issuance. Each license must be renewed annually on or before March thirty-first. The fee for a renewal license is the same as for an original license. If the commissioner does not issue a requested original license or renewal license, the fee paid must be refunded to the applicant

4.1-27-07. Investigation of auction market - Hearing to determine whether license should be issued or revoked

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The commissioner, upon the commissioner's own motion or upon a complaint by any person, may enter an investigation of the sales and transactions of any livestock auction market and of the conditions under which the business of the livestock auction market is conducted. The commissioner may conduct a hearing to determine whether the license of any auction market should be revoked or whether the application of the owner or operator of a livestock auction market for an original or renewal license should be denied

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The commissioner shall conduct an investigation of an alleged violation of this chapter when: a

A complaint, allegation, or order to show cause, alleging an act which would constitute a violation of this chapter, is filed by the packers and stockyards administration of the United States; The commissioner has information sufficient to form a reasonable belief that a violation of this chapter has occurred; or The commissioner has received a sworn statement, affidavit, or other evidence from any person alleging a violation of this chapter

The commissioner shall conduct a hearing to determine whether a violation has occurred when, pursuant to an investigation, probable cause exists that a violation of this chapter has occurred

The commissioner shall conduct an audit, or cause an audit to be conducted, when probable cause exists that any livestock auction market has violated any of the financial provisions of this chapter, when it reasonably appears that the liabilities of the livestock auction market exceed its assets, or when the auction market has refused to pay a proper claim without reasonable cause

4.1-27-08. Cease and desist authority

The commissioner may issue an order to cease and desist when, in the opinion of the commissioner, any auction market within the state is taking or planning any action which is or may be in violation of this chapter. If an order is granted, the commissioner shall conduct a hearing within thirty days of the issuance of the order to determine whether the actions of the person named in the order violated or would have violated this chapter. After the hearing, but not later than forty-five days after the issuance of the order, the commissioner shall revoke the order or make it permanent, as determined by the evidence

4.1-27-09. Injunctive authority

The commissioner may seek an order from the district court of Burleigh County to enjoin a prohibited act when the commissioner believes any auction market or person is violating this chapter or is pursuing a course of action which may lead to a violation of this chapter

4.1-27-10. Sanitary regulations of livestock auction market

Each livestock auction market must be maintained in a sanitary condition in accordance with this chapter. Any portion of a livestock auction market used for the handling of hogs, including all hogpens, alleys, and auction markets, must be equipped with concrete floors at least three inches [7.62 centimeters] thick. The concrete floors must be cleaned and disinfected after each sale, or in case of a continuous sale, not less than once each week or as may be prescribed by the state board of animal health

4.1-27-11. Scales maintained by auction market to be inspected

All scales used in the operation of a livestock auction market must be tested and inspected by the department of weights and measures as provided by law. All livestock sold by weight must be weighed on such scales, and the purchaser and seller of the livestock must be furnished with a true and correct statement of the weight

4.1-27-12. Records to be kept by operator of auction market - Contents - Examination - Report

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The operator of each livestock auction market shall keep on file an accurate record of the following: a

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The date on which each consignment of animals was received and sold; The name and address of the buyer and seller of the consigned animals; The number and species of the animals received and sold; and The marks and brands on each such animal

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The records, together with the gross selling price, commission, and other proper care, handling, and sales charges on each consignment of livestock must be available for inspection by the commissioner, or authorized inspectors. A copy of the information required in this section must be supplied to the owner of the livestock. All records of sales during the preceding twelve months must be kept readily accessible for immediate examination by the commissioner

4.1-27-13. Notice - Nonsufficient funds checks

A livestock auction market that receives a check for the sale of livestock which is returned unpaid with a notation that the payment has been refused because of nonsufficient funds shall notify the commissioner within two business days after receipt of the returned check

4.1-27-14. Inspection of livestock - Fees and rules governing

Before it is offered for sale, each animal that enters a livestock auction market must be inspected for health by a veterinarian licensed in this state and approved by the state board of animal health. Cattle also must be inspected for brands by a trained brand inspector, acting under rules adopted by the North Dakota stockmen's association and the state board of animal health. Veterinary inspection must include all livestock, whether it is to be moved interstate or intrastate. The veterinary inspector must be recommended by the livestock auction market and approved by the state board of animal health. The veterinarian must be a local veterinarian or a veterinarian of the vicinity, unless there is no such veterinarian available. If the livestock auction agency fails to recommend a veterinarian within a reasonable time, the board may approve a veterinarian, if qualified and willing to accept the position at the market, and provide notice to the market agency of the appointment. The services and duties of the veterinary inspector are under the supervision of the state board of animal health and the inspector must be relieved of office when the inspector fails to perform the required services and duties. Fees for the inspection must be paid to the veterinarian by the livestock auction market company and must be in an amount agreed upon by the auction market company and the veterinarian

4.1-27-15. Livestock unfit for sale

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Livestock may not be offered for sale or sold at any licensed public livestock auction market if the livestock has a condition including the following: a

Is infected with a disease that permanently renders the livestock unfit for human consumption; Is unable to rise to its feet by itself; or b. Has severe neoplasia; c. Has severe actinomycosis; d

e. Has a fractured long bone or other fractures or dislocation of a joint that renders the livestock unable to bear weight on the affected limb without the limb collapsing

If, in the judgment of a veterinarian licensed in this state and approved by the state board of animal health, the livestock consigned and delivered to the premises of a livestock auction market is affected by any of the conditions described above, the veterinarian shall humanely euthanize the livestock or direct the consignor to immediately remove the livestock from the premises of the livestock auction market. All expenses incurred for euthanasia and disposal of the livestock under this section are the responsibility of the consignor. Collection of expenses is not the responsibility of the consignee

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4.1-27-16. Treatment administered to livestock before removal from auction market - Fees for inspection and treatment

An operator of a livestock auction market may not permit the removal of any livestock from the establishment until the livestock has been treated in accordance with the rules adopted by the state board of animal health. If livestock is destined to be shipped interstate, the authorized veterinarian of the board shall furnish to each purchaser a certificate showing that inspection Page No. 4 has been made and treatment administered in accordance with the requirements of the state of destination. All fees for veterinary inspection, treatment, and services, including brand inspection, must be collected by the operator of the livestock auction market and paid to the inspector

4.1-27-17. Grievance committee

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Any livestock auction market who has a complaint against the veterinarian assigned to the livestock auction market, or any veterinarian that has a complaint against the auction market to which the veterinarian is assigned, may submit a written complaint to the grievance committee. The grievance committee consists of: a

The president of the North Dakota stockmen's association or the president's designee; The president of the livestock auction market association or the president's designee; and The president of the North Dakota veterinary medical association or the president's designee

The members of the committee shall choose one member to serve as chairman. The committee shall meet at the call of the chairman. The committee shall take all complaints under consideration and report a recommendation of the committee to the state board of animal health within thirty days after receipt of the complaint

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4.1-27-18. Operator to warrant title to purchaser - Dispute in title of animal sold

The operator of each livestock auction market shall warrant to the purchaser the title of all livestock bought by the purchaser through the auction market and the operator is liable to the rightful owner of any livestock sold through the auction market for the net proceeds in cash received for the livestock. If the operator of an auction market is notified by an authorized brand inspector that there is a question as to whether any designated livestock sold through the auction market is lawfully owned by the consignor of the livestock, the operator shall hold the proceeds received from the sale of the livestock for a reasonable time, not to exceed sixty days, to permit the consignor to establish ownership. At the expiration of the allotted time, if the consignor fails to establish lawful ownership of the livestock to the satisfaction of the brand inspector, the proceeds must be remitted to the state treasurer for deposit in the North Dakota stockmen's association fund

4.1-27-19. Use of fees - Grounds for refusal or revocation of license - Procedure on default of licensee

All fees collected by the commissioner under this chapter must be credited to the general fund of the state treasury. A license to operate a livestock auction market may be refused or revoked for any of the reasons specified in sections 4.1-83-10, 4.1-83-19, 4.1-88-09, or 4.1-88-18. When the holder of a license issued under this chapter defaults in any of the conditions of any bond filed with the commissioner by the licensee, the commissioner will become trustee of the bond and sections 4.1-83-21 through 4.1-83-28 and 4.1-88-20 through 4.1-88-27 govern the procedure to be followed

4.1-27-20. Review by the court

The action of the commissioner in denying an application for a license or in revoking or suspending a license may be appealed to the district court of Burleigh County by the procedure applicable to appeals taken in the manner provided in chapter 28-32, except the commissioner's order revoking or suspending the license may be stayed by the court appealed to upon filing with the clerk of the court a bond approved by and in the amount set by the judge of the district court for the faithful observance of the laws of the state relative to the operation of the business licensed during the pendency of the appeal

4.1-27-21. Unlawful acts

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1. Make or cause any false entry or statement of fact to be made in any application, financial statement, or report filed with the department under this chapter; Fail to keep and maintain suitable records that disclose all purchases and sales of livestock or refuse to allow any authorized agent of the department to have access, during reasonable hours, to inspect and to copy any or all of the records relating to the dealer's business; Fail or refuse to furnish the information required under this chapter as prescribed by the department; Fail to notify the commissioner of the receipt of a nonsufficient funds check as required by section 4.1-27-13; Fail to pay brand inspection fees or veterinarian fees as required by law; Fail to collect beef promotion assessments pursuant to chapter 4.1-03; or Fail to pay for livestock purchased, including the issuance of a check or payment for livestock purchased, when the check is returned unpaid with a notation that the payment has been refused because of nonsufficient funds

4.1-27-22. Penalties - Criminal - Civil

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Any auction market or person who willfully violates any provision of this chapter is guilty of a class A misdemeanor

Any auction market or person who willfully violates any provision of this chapter is subject to a civil penalty not to exceed five thousand dollars for each violation. The civil penalty may be adjudicated by the courts or by the commissioner through an administrative hearing under chapter 28-32

4.1-27-23. Public livestock markets or commission firms - Duplicate scale tickets

All public livestock markets or commission firms doing business in this state shall deliver to each person consigning livestock to the market or purchasing livestock from the market a duplicate scale ticket showing the weight of such livestock

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