COLORADO DEPARTMENT OF AGRICULTURE
Inspection and Consumer Services Division
Rules for Determining the Amount of Civil Penalties for Violation of the Farm Products Act and the Commodity Handler Act
8 CCR 1202-9
STATEMENT OF BASIS, PURPOSE, AND LEGAL AUTHORITY.
The purpose of these changes to the existing rules is twofold. The first purpose is to make these rules consistent with the recent statutory amendments which changed the name of the Commodity Warehouse Act to the Commodity Handler Act. The second purpose of this rule change is to implement statutory changes which added violations of the Commodity Handler Act. [See §§ 204 (L) and 205(F)]
PART 1:	NOTICE OF VIOLATION, PAYMENT OF PENALTY, HEARINGS, SUSPENSION OF PENALTY.
101.	The Department's personnel, generally acting at the person's place of business or other field location, will prepare and serve a notice of violation, which will identify the violator, cite the provision (s) of the statute or rules violated, and state the presumptive amount of penalty assessed for each cited violation. The penalty may be suspended by the employee who issues the violation notice, or by action of the Commissioner or his designee at a time after issuance of the violation.
102.	The person against whom the notice is issued may request a hearing to contest the amount of penalty or the occurrence of the violations charged, by submitting a written request within 20 days of his receipt of the notice of violation. Any hearing so requested, will be held before the Commissioner or his designee, pursuant to section 24-4-105, C.R.S.. A hearing may be requested whether or not the penalty has been suspended.
103.	If no hearing is requested, the penalty-set forth on the notice is due and payable within 30 days of the issuance of the notice of violation, unless it has been suspended.
104.	If a hearing regarding the violation is held, and the Commissioner or his designee who conducts the hearing, finds that the violation(s) charged were committed, the Commissioner or his designee who conducts the hearing, may assess any penalty allowed by law, notwithstanding the presumptive penalty amounts for such violations which are set forth in these rules.
105.	Checks or money orders which are submitted in payment of penalties shall be made payable to the Colorado Department of Agriculture.
106.	If a penalty has been suspended, and the person against whom it was assessed violates the same statutory provision or rule within 12 months after the violation for which the penalty was assessed, the amount of the suspended penalty will be added to the penalty which is finally assessed for the later violation.
PART 2.	TYPES OF VIOLATIONS.
201.	Violations of the Farm Products Act and Commodity Handler Act, for purposes of these rules, are divided into three types, listed below. Each type of violation carries a range of presumptive penalties which is listed in its own table, set forth below. The factors by which the amount of the presumptive penalty for any violation may be determined, are set forth in parts 3, 4 and 5.
202.	The references to the types of violations contained in rules 203 through 205, are not intended to be definitional; they merely generally describe the conduct referred to in each cited statutory section. The statute defines the conduct which constitutes a violation.
203.	TYPE I VIOLATION.
Violations of the following statutory sections are Type I violations, and the presumptive penalties for them are set out in Table I.
Farm Products Act
A.	12-16-111 - (Failure of consignee to keep proper records.)
B.	12-16-112(1) - (Failure to remit funds and/or account to consignor)
C.	12-16-112 (2) - (Failure to keep records of consignment transactions for one year.)
D.	12-16-113 - (Failure to make proper settlement regarding pooled consignments.)
E.	12-16-115 (1) (g) - (Fraud/deception in procurement/attempted procurement of a license.)
F.	12-16-115(1) (h) - (Failure to comply with a lawful order of the Commissioner)
Commodity Handler Act
G.	12-16-208 - (Failure to comply with contract, recordkeeeping and/or reporting requirements for credit sale contracts.)
H.	12-16-211 - (Failure to comply with the requirements for the use and recordkeeping of negotiable warehouse receipts.)
I.	12-16-214 - (Improper disposal of tainted commodities.)
J.	12-16-217 - (Failure to pay inspection fee.)
K.	12-16-221(1) (g) - (Fraud/deception in the procurement/attempted procurement of a license.)
L.	12-16-221(1)(h) - (Failure to comply with a lawful order of the commissioner.)
TABLE I	
 	FIRST OFFENSE	SECOND OFFENSE	THIRD OFFENSE	
 	A	B	C	A	B	C	A	B	C	
1	$0	10.	20.	 	 	 	 	 	 	
2	$10.	20.	40.	20.	40.	80.	 	 	 	
3	$20.	40.	80.	40.	80.	160.	80.	160.	240.	

204.	TYPE II VIOLATION.
Violations of the following statutory sections are Type II violations, and the presumptive penalties for them are set out in Table II.
Farm Products Act
A.	12-16-112 (3) - (Failure to pay for farm products as specified.)
B.	12-16-115(a) - (Making fraudulent charges or returns for the handling, sale or storage of farm products.)
C.	12-16-115 (c) - (Intentional false/misleading statements as to market conditions or as to the condition, quality, or quantity of farm products received, handled, sold or stored.)
D.	12-16-115 (i) - (Interfering with or hindering an authorized representative of the commissioner.)
E.	12-16-115 (i) - (Dealer selling farm products for less than current market price to any person with whom he has a any financial connection.)
F.	12-16-115(1) - (Licensed cash buyer, failing to pay cash.)
Commodity Handler Act
G.	12-16-213 - (Failure to keep required records.)
H.	12-16-216 - (Failure to correct shortage and/or refusal to submit to inspection.)
I.	12-16-221(1)(a) - (Fraudulent charges or returns for the handling, sale or storage of farm products.)
J.	12-16-221(1)(c) - (Intentional false/misleading statements as to market conditions or as to the condition, quality, or quantity of farm products received, handled, sold or stored.)
K.	12-16-221 (.1) (i) - (Interfering with or hindering an authorized representative of the commissioner.)
L.	12-16-221(1) (k) - (Commodity Handler selling farm products for less than current market price to any person with whom he has a any financial connection.)
TABLE II	
 	FIRST OFFENSE	SECOND OFFENSE	THIRD OFFENSE	
 	A	B	C	A	B	C	A	B	C	
1	$25.	50.	100.	 	 	 	 	 	 	
2	$50.	100.	200.	100.	200.	400.	 	 	 	
3	$100.	200.	400.	200.	350.	500.	300.	450.	600.	

205.	TYPE III VIOLATION.
Violations of the following statutory sections are Type III violations, and the presumptive penalties for them are set out in Table III.
Farm Products Act
A.	12-16-109 - (Failure to comply with a cease and desist order.)
B.	12-16-115 (b) - (Willful failure/refusal to render a true account of sales or storage or to make settlement thereon.)
C.	12-16-115 (d) - (Fictitious sales/collusion/unfair practices to defraud the owners of farm products.)
D.	12-16-115(e) - (Acting as dealer or agent without having a license.)
E.	12-16-ll5(f) - (Willful conversion of farm products of another.)
F.	12-16-115 (k) - (Paying for farm products with insufficient fund checks.)
Commodity Handler Act
G.	12-16-212 - (Failure to use scale tickets and/or negotiable warehouse receipts properly.)
H.	12-16-219 - (Failure to comply with a cease and desist order.)
I.	12-16-221(1)(b) - (Willful failure/refusal to render a true account of sales or storage or to make settlement thereon.)
J.	12-16-221 (1) (d) - (Fictitious sales/collusion/unfair practices to defraud the owners of farm products.)
K.	12-16-221(1)(e) - (Acting as warehouseman without having a license.)
L.	12-16-221(1)(f) - (Willful conversion of farm products of another.)
M.	12-16-221(1) (j) - (Willful alteration/destruction of any negotiable warehouse receipt or record of such and/or fraudulent use of warehouse receipts.)
N.	12-16-221(1) (L) - (Paying for a commodity with insufficient fund checks.)
TABLE III	
 	FIRST OFFENSE	SECOND OFFENSE	THIRD OFFENSE	
 	A	B	C	A	B	C	A	B	C	
1	$50.	100.	200.	 	 	 	 	 	 	
2	$100.	200.	400.	200.	350.	500.	 	 	 	
3	$200.	400.	600.	300.	500.	800.	500.	750.	1000.	

PART 3.	ISOLATED, NEGLIGENT AND WILLFUL VIOLATIONS.
301.	Isolated transactions. “Isolated transaction” violations are those which are committed by a person who has not been engaged in business or other activities in which he could reasonably be expected to be actually aware of the existence of the Farm Products Act and/or the Commodity Handler Act, and who has committed the violation in the course of an isolated transaction or an isolated series of transactions. If such person has been previously actually informed of the existence of the Farm Products Act and/or the Commodity Handler Act, such as by the issuance of a notice of violation or otherwise, any violation committed by him, even if otherwise “isolated” in nature, will not be considered as “isolated” for purposes of this rule. The presumptive penalty to be assessed for a violation of this type shall be determined from line 1 of the applicable table for the type of violation.
302.	Negligent violations. When the violation is due to negligence, the presumptive penalty shall be determined from Line 2 of the applicable table set forth in these rules. 
303.	Willful violations. When a person has willfully committed a violation, or has committed the same violation three or more times within a 24-month period of time, all violations after the second violation will be construed to be willful and the presumptive penalty shall be determined from Line 3 of the applicable table set forth in these rules.
PART 4.	SEVERITY OF VIOLATION.
401.	Any one of the following factors may be considered in determining the severity of a violation.
(a)	Potential monetary consequences.
(b)	Potential for personal injury.
(c)	Degree of disregard for the law.
402.	Minimal Severity. When the violation has a minimal severity, the presumptive penalty shall be determined from Column A of the applicable table set forth in these rules. 
403.	Moderate Severity. When the violation has a moderate severity, the presumptive penalty shall be determined from Column B of the applicable table set forth in these rules.
404.	Great Severity. When the violation has a great severity, the presumptive penalty shall be determined from Column C of the applicable table set forth in these rules.
PART 5.	FREQUENCY OF VIOLATION
501.	The amount of presumptive penalty for a violation increases with the number of times the person commits the violation, in accordance with these rules and the tables set out herein.
502.	When a person commits the same violation more than three times in 24 months, the presumptive penalty for the third violation shall apply.
503.	The period of time in determining frequency of violations shall be 24 months. If a person has not committed the same violation in 24 months, the next violation of the same statutory provision or rule, shall be considered as a first offense.
504.	A person who commits a violation of the same statutory provision or rule three or more times in five years, shall not be protected by the 24 month limitation, and shall be subject to the presumptive penalty for the third offense.