1.1                          A bill for an act 
  1.2             relating to agriculture; agricultural marketing and 
  1.3             bargaining; requiring mediation and binding 
  1.4             arbitration between agricultural processors and 
  1.5             accredited agricultural producer associations; 
  1.6             requiring checkoff fee collections by the processors; 
  1.7             ensuring full payment for all acres contracted by 
  1.8             processors; amending Minnesota Statutes 1996, sections 
  1.9             17.693, subdivision 5, and by adding a subdivision; 
  1.10            17.696, subdivision 1; 17.698; and 27.19, subdivision 
  1.11            1; proposing coding for new law in Minnesota Statutes, 
  1.12            chapter 17; repealing Minnesota Statutes 1996, section 
  1.13            17.697. 
  1.14  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.15     Section 1.  Minnesota Statutes 1996, section 17.693, is 
  1.16  amended by adding a subdivision to read: 
  1.17     Subd. 2a.  [BARGAINING.] "Bargaining" means the mutual 
  1.18  obligation of a handler and an association of their designated 
  1.19  representatives to meet at reasonable times and confer and 
  1.20  negotiate in good faith.  Negotiations may include all terms 
  1.21  relative to trading between handlers and producers of the 
  1.22  agricultural commodity such as: 
  1.23     (1) prices and terms of sale; 
  1.24     (2) quality specifications; 
  1.25     (3) quantity to be marketed by acreage or weight; 
  1.26     (4) transactions involving products and services utilized 
  1.27  by one party and provided by the other party; and 
  1.28     (5) checkoff procedures for assessments levied by the 
  1.29  association, not to exceed one-half of one percent of the gross 
  2.1   value of a producer's annual production contract, to be 
  2.2   collected by handlers from proceeds to producers within the 
  2.3   bargaining unit and paid to the association. 
  2.4      Sec. 2.  Minnesota Statutes 1996, section 17.693, 
  2.5   subdivision 5, is amended to read: 
  2.6      Subd. 5.  "Agricultural commodity" includes all 
  2.7   agricultural goods produced under contract for marketing as 
  2.8   defined by the commissioner of agriculture.  It does not include 
  2.9   any commodity sold by a producer to another producer for the 
  2.10  other's own exclusive use and not for resale.  The kinds, types 
  2.11  and subtypes of products to be classed together as an 
  2.12  agricultural commodity for the purposes of sections 17.691 to 
  2.13  17.701 shall be determined by the commissioner on the basis of 
  2.14  common usage and practice means fruits and vegetables. 
  2.15     Sec. 3.  Minnesota Statutes 1996, section 17.696, 
  2.16  subdivision 1, is amended to read: 
  2.17     Subdivision 1.  Producers of agricultural commodities are 
  2.18  free to join together voluntarily in associations as authorized 
  2.19  by law without interference by handlers.  A handler shall not 
  2.20  engage in any of the following practices, defined as unfair 
  2.21  practices: 
  2.22     (a) To coerce a producer in the exercise of the right to 
  2.23  join and belong to or to refrain from joining or belonging to an 
  2.24  association or to refuse to deal with a producer because of the 
  2.25  exercise of the right to join and belong to an association.  
  2.26     (b) To discriminate against a producer with respect to 
  2.27  price, quantity, quality or other terms of purchase, acquisition 
  2.28  or other handling of agricultural products because of membership 
  2.29  in or contract with an association.  
  2.30     (c) To coerce or intimidate a producer to breach, cancel or 
  2.31  terminate a membership agreement or marketing contract with an 
  2.32  association or a contract with a handler.  
  2.33     (d) To pay or loan money, give anything of value or offer 
  2.34  any other inducement or reward to a producer for refusing or 
  2.35  ceasing to belong to an association.  
  2.36     (e) To make or circulate unsubstantiated reports about the 
  3.1   finances, management or activities of associations or other 
  3.2   handlers.  
  3.3      (f) To conspire, combine, agree or arrange with any other 
  3.4   person to do or aid or abet the doing of any practice which is 
  3.5   in violation of sections 17.691 to 17.701.  
  3.6      (g) To refuse to bargain with an association with whom the 
  3.7   handler has had prior dealings or with an association whose 
  3.8   producers in the bargaining units have had dealings with the 
  3.9   handler prior to July 1, 1973.  
  3.10     (h) To refuse to collect the checkoff fees levied by an 
  3.11  association within the limitations of section 17.693, 
  3.12  subdivision 2a, clause (5). 
  3.13     Sec. 4.  [17.6971] [MEDIATION AND ARBITRATION OF DISPUTES.] 
  3.14     Subdivision 1.  [REQUIRED MEDIATION.] (a) Matters remaining 
  3.15  in dispute between a handler and a qualified association 35 days 
  3.16  before the start of a marketing year must be submitted by the 
  3.17  parties to required mediation.  By 30 days before the start of a 
  3.18  marketing year, the parties must have mutually agreed on a 
  3.19  mediator and on sharing the costs of mediation or must have 
  3.20  notified the commissioner that the commissioner's services are 
  3.21  needed.  If services of the commissioner are used, the parties 
  3.22  must share all costs of mediation equally.  Mediation must 
  3.23  continue for no more than three days, for annual crops, or five 
  3.24  days for other commodities unless the mediator declares sooner 
  3.25  that resolution by mediation is not possible.  Mediation may be 
  3.26  extended by mutual agreement of the bargaining parties.  
  3.27     (b) At the end of the mediation period or upon the 
  3.28  mediator's declaration under paragraph (a), the mediator shall 
  3.29  promptly prepare a report specifying all agreements reached in 
  3.30  mediation and recommending that the parties either resume 
  3.31  bargaining as to all matters remaining in dispute for up to two 
  3.32  days or that the parties submit all matters remaining in dispute 
  3.33  to arbitration.  The parties must proceed according to the 
  3.34  mediator's recommendation.  If the parties are to resume 
  3.35  bargaining, the bargaining must commence on the day after the 
  3.36  day on which the mediator makes the recommendation.  Matters 
  4.1   remaining in dispute at the end of the specified bargaining 
  4.2   period must be submitted to arbitration. 
  4.3      Subd. 2.  [ARBITRATION.] (a) The parties shall notify the 
  4.4   commissioner of agriculture at the end of the mediation period 
  4.5   under subdivision 1, paragraph (b), and an arbitration committee 
  4.6   must be selected as provided in paragraph (f).  Within three 
  4.7   days after the mediator recommends arbitration or three days 
  4.8   after the conclusion of the period of further bargaining, as 
  4.9   provided in subdivision 1, each party shall submit to the 
  4.10  arbitration committee its final offer in which it shall identify 
  4.11  all matters as to which the parties agree with contractual 
  4.12  language setting forth these agreements and all matters as to 
  4.13  which the parties do not agree with contractual language setting 
  4.14  forth the party's final offer for resolution of those 
  4.15  disagreements. 
  4.16     (b) For all matters submitted to arbitration, the 
  4.17  arbitration committee shall choose between the final offers of 
  4.18  the parties.  If the parties reach an agreement on the matters 
  4.19  under arbitration before the arbitration committee issues a 
  4.20  decision, they may submit a joint final offer that the 
  4.21  arbitration committee shall accept and render as the decision.  
  4.22  The arbitration committee may hold hearings and administer 
  4.23  oaths, examine witnesses and documents, take testimony and 
  4.24  receive evidence, and issue subpoenas to compel the attendance 
  4.25  of witnesses and the production of records.  A person who fails 
  4.26  to obey the subpoena of an arbitration committee may be punished 
  4.27  for contempt of court on application by the arbitration 
  4.28  committee to the district court for the county in which the 
  4.29  failure occurs.  The arbitration committee may use other 
  4.30  information in addition to that provided by or elicited from the 
  4.31  parties.  The arbitration committee shall issue a decision 
  4.32  within ten days of the commencement of arbitration and that 
  4.33  decision is binding on the parties.  If the parties reach an 
  4.34  agreement on the matters in the arbitration committee's decision 
  4.35  prior to signing the contract, they may submit a joint final 
  4.36  offer to the arbitration committee.  The arbitration committee 
  5.1   shall rescind the previous decision and accept and render the 
  5.2   joint final offer as the decision. 
  5.3      (c) Within five days after the arbitration committee's 
  5.4   decision, the commissioner shall prepare a contract that must 
  5.5   include all terms agreed to by the parties in bargaining or 
  5.6   settled by mediation or by arbitration and shall present the 
  5.7   contract to the parties who must sign the contract within two 
  5.8   days of its presentation. 
  5.9      (d) The commissioner, in consultation with the bureau of 
  5.10  mediation services, shall establish a panel of arbitrators who 
  5.11  are qualified by education, training, or experience to carry out 
  5.12  the responsibilities of an arbitrator under this section. 
  5.13     (e) All costs of arbitration must be borne equally by the 
  5.14  parties.  The arbitration committee shall submit a statement of 
  5.15  charges and expenses to the parties and to the commissioner.  
  5.16  Each party shall pay the arbitrator directly. 
  5.17     (f) The arbitration committee consists of one person 
  5.18  selected by the association, one person selected by the handler, 
  5.19  and one person selected by the persons representing the 
  5.20  association and the handler.  The third person is the chair of 
  5.21  the committee.  If the third person cannot be agreed upon by the 
  5.22  association and the handler persons, the commissioner shall 
  5.23  submit a list composed of the names of five persons 
  5.24  knowledgeable in the marketing of the agricultural commodity 
  5.25  from which the third person must be chosen.  The selection must 
  5.26  be made by the association representative and the handler 
  5.27  representative, each striking two different names from the 
  5.28  list.  The remaining name must be the person who serves as the 
  5.29  third person and as its chair.  The order of striking must be 
  5.30  determined by chance. 
  5.31     Sec. 5.  Minnesota Statutes 1996, section 17.698, is 
  5.32  amended to read: 
  5.33     17.698 [BASIS FOR MEDIATION AND BARGAINING ARBITRATION 
  5.34  DECISIONS.] 
  5.35     All decisions of mediation and bargaining arbitration which 
  5.36  result from section 17.697 17.6971 shall be based upon the 
  6.1   following factors: 
  6.2      (a) Prices or projected prices for the agricultural 
  6.3   commodity paid by the competing handlers in the market area or 
  6.4   competing market areas.  
  6.5      (b) Amount of the commodity produced or projections of 
  6.6   production in the production area or competing marketing areas.  
  6.7      (c) Relationship between the quantity produced and the 
  6.8   quantity handled by the handler.  
  6.9      (d) The producers cost of production including the cost 
  6.10  which would be involved in paying farm labor a fair wage rate 
  6.11  and providing them with adequate housing.  
  6.12     (e) The average consumer prices for goods and services, 
  6.13  commonly known as the cost of living.  
  6.14     (f) The impact of the award on the competitive position of 
  6.15  the handler in the marketing area or competing areas.  
  6.16     (g) The impact of the award on the competitive position of 
  6.17  the agricultural commodity in relationship to competing 
  6.18  commodities.  
  6.19     (h) A fair return on investment.  
  6.20     (i) Kind, quality or grade of the commodity involved.  
  6.21     (j) Stipulation of the parties.  
  6.22     (k) Such other factors which are normally or traditionally 
  6.23  taken into consideration in determining prices, quality, 
  6.24  quantity and the costs of other services involved.  
  6.25     Sec. 6.  Minnesota Statutes 1996, section 27.19, 
  6.26  subdivision 1, is amended to read: 
  6.27     Subdivision 1.  [PROHIBITED ACTS.] (a) A person subject to 
  6.28  the provisions of this section and sections 27.01 to 27.15 may 
  6.29  not:  
  6.30     (1) operate or advertise to operate as a dealer at 
  6.31  wholesale without a license; 
  6.32     (2) make any false statement or report as to the grade, 
  6.33  condition, markings, quality, or quantity of produce, as defined 
  6.34  in section 27.069, received or delivered, or act in any manner 
  6.35  to deceive a consignor or purchaser; 
  6.36     (3) refuse to accept a shipment contracted for by the 
  7.1   person, unless the refusal is based upon the showing of a state 
  7.2   inspection certificate secured with reasonable promptness after 
  7.3   the receipt of the shipment showing that the kind and quality of 
  7.4   produce, as defined in section 27.069, is other than that 
  7.5   purchased or ordered by the person; 
  7.6      (4) fail to account or make a settlement for produce within 
  7.7   the required time; 
  7.8      (5) violate or fail to comply with the terms or conditions 
  7.9   of a contract entered into by the person for the purchase or 
  7.10  sale of produce; 
  7.11     (6) purchase for a person's own account any produce 
  7.12  received on consignment, either directly or indirectly, without 
  7.13  the consent of the consignor; 
  7.14     (7) issue a false or misleading market quotation, or cancel 
  7.15  a quotation during the period advertised by the person; 
  7.16     (8) increase the sales charges on produce shipped to the 
  7.17  person by means of "dummy" or fictitious sales; 
  7.18     (9) receive decorative forest products and the products of 
  7.19  farms and waters from foreign states or countries for sale or 
  7.20  resale, either within or outside of the state, and give the 
  7.21  purchaser the impression, through any method of advertising or 
  7.22  description, that the produce is of Minnesota origin; 
  7.23     (10) fail to notify in writing all suppliers of produce of 
  7.24  the protection afforded to suppliers by the person's licensee 
  7.25  bond, including:  availability of a bond, notice requirements, 
  7.26  and any other conditions of the bond; 
  7.27     (11) make a false statement to the commissioner on an 
  7.28  application for license or bond or in response to written 
  7.29  questions from the commissioner regarding the license or bond; 
  7.30     (12) commit to pay and not pay in full for all produce 
  7.31  committed for.  A processor may not pay an amount less than the 
  7.32  full contract price if the crop produced is satisfactory for 
  7.33  processing and is not harvested for reasons within the 
  7.34  processor's control.  If the processor sets the date for 
  7.35  planting, bunching, unusual yields, and a processor's inability 
  7.36  or unwillingness to harvest must be considered to be within the 
  8.1   processor's control.  Under this clause growers must be 
  8.2   compensated for passed acreage at the same rate for grade and 
  8.3   yield as they would have received had the crop been harvested in 
  8.4   a timely manner minus any contractual provision for green manure 
  8.5   or feed value.  Both parties are excused from payment or 
  8.6   performance for crop conditions that are beyond the control of 
  8.7   the parties; or 
  8.8      (13) discriminate between different sections, localities, 
  8.9   communities, or cities, or between persons in the same 
  8.10  community, by purchasing produce from farmers of the same grade, 
  8.11  quality, and kind, at different prices, except that price 
  8.12  differentials are allowed if directly related to the costs of 
  8.13  transportation, shipping, and handling of the produce and a 
  8.14  person is allowed to meet the prices of a competitor in good 
  8.15  faith, in the same locality for the same grade, quality, and 
  8.16  kind of produce.  A showing of different prices by the 
  8.17  commissioner is prima facie evidence of discrimination.  
  8.18     (b) A separate violation occurs with respect to each 
  8.19  different person involved, each purchase or transaction 
  8.20  involved, and each false statement. 
  8.21     (c) If an acreage pool arrangement is established to meet 
  8.22  the full contract price requirements in paragraph (a), clause 
  8.23  (12), and sufficient funds are not available to pay for all 
  8.24  passed acres, the processor is responsible for paying the 
  8.25  growers the full contract price for the unpaid balance owed on 
  8.26  the passed acres. 
  8.27     Sec. 7.  [REPEALER.] 
  8.28     Minnesota Statutes 1996, section 17.697, is repealed.