HF 918

as introduced - 79th Legislature (1995 - 1996) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to agriculture; providing for the prevention 
  1.3             of economic waste in the marketing of certain 
  1.4             agricultural crops produced in Minnesota by 
  1.5             establishing minimum prices; providing for supply 
  1.6             management and orderly marketing, administration, and 
  1.7             enforcement; appropriating money; imposing a penalty; 
  1.8             proposing coding for new law in Minnesota Statutes, 
  1.9             chapter 17. 
  1.10  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.11     Section 1.  [LEGISLATIVE INTENT.] 
  1.12     Sections 1 to 7 are enacted in the exercise of the power of 
  1.13  the state to protect and further the public health and welfare. 
  1.14  It is declared that Minnesota agriculture is affected with a 
  1.15  public interest in that:  
  1.16     (a) The production, processing, and distribution of 
  1.17  agricultural products constitute a paramount industry of this 
  1.18  state that provides substantial required revenues for the state 
  1.19  and its political subdivisions, provides employment and a means 
  1.20  of livelihood for a substantial part of the population of 
  1.21  Minnesota, and furnishes essential foods that are vital to the 
  1.22  public health and welfare.  
  1.23     (b) During times when the state's producers have received 
  1.24  parity prices for their commodities, the economy of the entire 
  1.25  state has prospered.  Parity prices promote balanced economic 
  1.26  growth because the income earned from agricultural production 
  1.27  has a multiplier effect in the state economy by creating more 
  2.1   jobs and tax revenue as raw commodities are marketed, processed, 
  2.2   and distributed.  
  2.3      (c) The stabilization, maintenance, and expansion of 
  2.4   Minnesota agriculture and domestic and foreign markets for its 
  2.5   products are necessary to assure the consuming public of an 
  2.6   adequate supply of food that is indispensable for a proper human 
  2.7   diet.  A need exists to protect the revenue source for the state 
  2.8   and its political subdivisions, to provide and maintain an 
  2.9   adequate standard of living for a large segment of Minnesota's 
  2.10  population, to maintain proper income levels for those engaged 
  2.11  in agriculture, and to maintain existing employment. 
  2.12     (d) The inability of individual producers to secure a 
  2.13  reasonable return for Minnesota grown agricultural products 
  2.14  prevents producers from maintaining a reasonable standard of 
  2.15  living.  That inability also increases economic insecurity due 
  2.16  to unemployment, and is a matter of general interest and concern 
  2.17  requiring appropriate action by the state to reduce 
  2.18  unemployment, financial depression, and economic instability. 
  2.19  The depressed income of agricultural producers has resulted in a 
  2.20  marked decrease in the number of producers and is a deterrent to 
  2.21  young persons engaging in agriculture.  
  2.22     An emergency now exists resulting from the depressed 
  2.23  condition of agriculture in this state and particularly the loss 
  2.24  of income to those engaged in the production of agricultural 
  2.25  products.  As a result, the program established in sections 1 to 
  2.26  7 should be diligently pursued to provide producers the chance 
  2.27  to earn 100 percent of parity in the marketplace.  
  2.28     Sec. 2.  [17.703] [DEFINITIONS.] 
  2.29     Subdivision 1.  [SCOPE.] The definitions in this section 
  2.30  apply to sections 17.703 to 17.708. 
  2.31     Subd. 2.  [AGRICULTURAL COMMODITY.] "Agricultural commodity"
  2.32  means milk, corn, soybeans, wheat, oats, rye, barley, flaxseed, 
  2.33  sunflowers, sorghum, or any other commodity included by the 
  2.34  commissioner.  
  2.35     Subd. 3.  [COMMISSIONER.] "Commissioner" means the 
  2.36  commissioner of agriculture.  
  3.1      Subd. 4.  [COUNTY LOAN RATE.] "County loan rate" means the 
  3.2   amount of money the United States Department of Agriculture will 
  3.3   loan per bushel on an agricultural commodity in each Minnesota 
  3.4   county.  
  3.5      Subd. 5.  [PERSON.] "Person" means an individual, 
  3.6   corporation, partnership, trust, association, cooperative 
  3.7   association, or other business unit or organization.  
  3.8      Subd. 6.  [PROCESSOR.] "Processor" means a person who buys 
  3.9   or takes title to or possession of an agricultural commodity for 
  3.10  the purpose of processing or manufacturing it, or selling, 
  3.11  reselling, or redelivering it in its original or processed form, 
  3.12  including a person or exchange that conducts such a business and 
  3.13  a person or exchange that buys the commodity from the producer 
  3.14  for the purpose of reselling it to a person or exchange that 
  3.15  conducts such a business.  
  3.16     Subd. 7.  [PRODUCER.] "Producer" means a person who owns or 
  3.17  operates an agricultural producing or growing facility for an 
  3.18  agricultural commodity and shares in the profits and risk of 
  3.19  loss from the operation, and who grows, raises, or produces the 
  3.20  agricultural commodity in Minnesota during the current or 
  3.21  preceding market year.  
  3.22     Subd. 8.  [STATEWIDE AVERAGE COUNTY LOAN RATE.] "Statewide 
  3.23  average county loan rate" means the average of all county loan 
  3.24  rates.  
  3.25     Subd. 9.  [WORLD CARRYOVER STOCKS.] "World carryover stocks"
  3.26  means the annual total quantity of world stocks of an 
  3.27  agricultural commodity in excess of consumption or use.  
  3.28     Subd. 10.  [WORLD USE.] "World use" means annual total 
  3.29  world consumption or use of an agricultural commodity.  
  3.30     Sec. 3.  [17.704] [MINIMUM PRICE.] 
  3.31     Subdivision 1.  [AUTHORITY OF COMMISSIONER.] The 
  3.32  commissioner shall establish the minimum price of an 
  3.33  agricultural commodity according to this section.  The minimum 
  3.34  price established by the commissioner applies to all grades and 
  3.35  types of the commodity produced, bought, or sold in the state 
  3.36  subject to normal price differentials reflecting grades and 
  4.1   quality.  
  4.2      Subd. 2.  [MINIMUM PRICE TRIGGER.] The minimum price of an 
  4.3   agricultural commodity, except sunflowers, is effective when a 
  4.4   minimum price equal to the minimum price established under this 
  4.5   section has been established for at least 60 percent of the 
  4.6   previous year's United States production of that commodity.  The 
  4.7   minimum price for sunflowers is effective when a minimum price 
  4.8   equal to the minimum price established under this section has 
  4.9   been established for at least 60 percent of the previous year's 
  4.10  United States production of sunflowers and when the minimum 
  4.11  price of soybeans is effective.  Notice that a minimum price 
  4.12  established by the commissioner has become effective must be 
  4.13  published in the State Register.  
  4.14     Subd. 3.  [MINIMUM PRICE LIMITS.] The minimum price 
  4.15  established by the commissioner for an agricultural commodity, 
  4.16  other than sunflowers, may not be less than 80 percent of parity 
  4.17  nor greater than 100 percent of parity as defined by United 
  4.18  States Code, title 7, section 1301, as amended through January 
  4.19  1, 1995.  The minimum price established for sunflowers may not 
  4.20  be less than 80 percent of parity nor greater than 100 percent 
  4.21  of parity, as determined by the commissioner.  
  4.22     Subd. 4.  [COUNTY MINIMUM PRICES.] The minimum price 
  4.23  established by the commissioner for an agricultural commodity 
  4.24  for a county may not be less than the state minimum price for 
  4.25  that commodity, multiplied by the ratio of the county loan rate 
  4.26  of the county in question to the statewide average county loan 
  4.27  rate.  For counties in which no county loan rates are available, 
  4.28  the commissioner shall determine transportation adjustments 
  4.29  based on normal price differentials.  
  4.30     Subd. 5.  [PROCEDURE FOR ESTABLISHMENT OF MINIMUM PRICE.] 
  4.31  As soon as practicable after each February 1, the commissioner 
  4.32  shall establish the minimum price for a commodity based on the 
  4.33  parity price in effect on February 1 of that year.  The 
  4.34  commissioner shall adopt emergency rules establishing the 
  4.35  minimum price in the manner provided under chapter 14.  The 
  4.36  rules are effective for one year from the time of their adoption 
  5.1   unless they provide for a shorter time.  The commissioner shall 
  5.2   keep data used in establishing a minimum price.  Any person 
  5.3   aggrieved by a minimum price established under this subdivision 
  5.4   may petition for judicial review as provided in section 14.44 
  5.5   within 30 days of the effective date of the rule. The data kept 
  5.6   by the commissioner constitutes the record for review by the 
  5.7   court.  
  5.8      Sec. 4.  [17.705] [SUPPLY MANAGEMENT AND ORDERLY 
  5.9   MARKETING.] 
  5.10     Subdivision 1.  [TRIGGER.] If world carryover stocks of an 
  5.11  agricultural commodity as a percent of total world use for that 
  5.12  commodity exceed by 25 percent the previous 20-year average of 
  5.13  world carryover stocks as a percentage of total world use for 
  5.14  the commodity, the commissioner shall implement supply 
  5.15  management or orderly marketing procedures, as provided in 
  5.16  subdivision 3, within 24 months.  
  5.17     Subd. 2.  [ALTERNATE TRIGGER.] Notwithstanding subdivision 
  5.18  1, the commissioner shall implement supply management or orderly 
  5.19  marketing procedures, as provided in subdivision 3, if the 
  5.20  commissioner determines that the volume of production of an 
  5.21  agricultural commodity threatens, or is likely to threaten, the 
  5.22  productivity of the state's agricultural land and is disrupting, 
  5.23  or is likely to disrupt, normal marketing patterns.  
  5.24     Subd. 3.  [PROCEDURES.] If the situation in subdivision 1 
  5.25  or 2 has occurred, the commissioner, after consultation with the 
  5.26  state's agricultural producers and their representatives, shall 
  5.27  adopt supply management or orderly marketing procedures that 
  5.28  include establishment of the production history of each farm 
  5.29  producing an agricultural commodity.  The procedures are not 
  5.30  subject to the administrative procedure act in chapter 14.  Any 
  5.31  adjustment of production or market shares must be on a pro rata 
  5.32  basis among producers of the commodity involved.  The magnitude 
  5.33  of the pro rata adjustment must be sufficient to protect the 
  5.34  productivity of the state's agricultural land and prevent the 
  5.35  disruption of normal marketing patterns.  The commissioner shall 
  5.36  consider the impact that procedures adopted under this section 
  6.1   may have on producers of livestock.  
  6.2      The production subject to adjustment under this subdivision 
  6.3   is the total production of the commodity for all purposes, 
  6.4   including amounts of the commodity used by the producer in the 
  6.5   producer's operations.  In adopting supply management or orderly 
  6.6   marketing procedures for a commodity, the commissioner shall 
  6.7   consider the impact of federal programs and other factors 
  6.8   affecting the production and supply of the commodity.  In 
  6.9   determining the magnitude of any pro rata production adjustment 
  6.10  or market share, the commissioner shall take into account any 
  6.11  adjustment in production made by producers under any federal 
  6.12  program.  
  6.13     Subd. 4.  [ADJUSTMENT.] The commissioner may adjust any pro 
  6.14  rata adjustment of production under subdivision 3 to assure 
  6.15  equitable allocation of the production adjustment in any case in 
  6.16  which the production history of a producer does not fairly 
  6.17  represent its production capacity.  
  6.18     Subd. 5.  [VETO BY LEGISLATURE OR PRODUCERS.] The supply 
  6.19  management or orderly marketing procedures authorized in 
  6.20  subdivision 3 become effective 30 days after being adopted by 
  6.21  the commissioner unless, within the 30-day period (1) the 
  6.22  procedures are disapproved or different procedures are adopted 
  6.23  by an act of the legislature; or (2) ten percent of the state's 
  6.24  producers of the commodity involved petition the commissioner 
  6.25  for a referendum on the procedures.  
  6.26     Not later than 30 days after receipt and validation of a 
  6.27  petition under clause (2), the commissioner shall authorize a 
  6.28  referendum to be conducted by secret ballot.  Any state producer 
  6.29  of the commodity involved is eligible to vote in the 
  6.30  referendum.  If a majority of the producers voting in the 
  6.31  referendum vote against the procedures, they must be withdrawn 
  6.32  by the commissioner and the minimum price for the agricultural 
  6.33  commodity involved is not applicable for the year during which 
  6.34  the procedures would have been in force.  
  6.35     Subd. 6.  [RELATION TO PLANTING PERIODS.] The supply 
  6.36  management or orderly marketing procedures authorized in 
  7.1   subdivision 3 become effective at least 180 days before the 
  7.2   beginning of the planting period for the commodity involved, or 
  7.3   at least 180 days before the beginning of the calendar year, 
  7.4   whichever is appropriate, if the commissioner determines that 
  7.5   the implementation of the procedures is likely to have no 
  7.6   comparative disadvantage for state producers of the commodity 
  7.7   involved.  
  7.8      Sec. 5.  [17.706] [FEES TO DEFRAY ADMINISTRATIVE COSTS.] 
  7.9      Subdivision 1.  [CHECK-OFF FEES.] To provide funds to 
  7.10  defray the expenses incurred by the commissioner in 
  7.11  administering sections 17.703 to 17.708, the commissioner may 
  7.12  establish a check-off fee in an amount equal to one-tenth of one 
  7.13  percent of the local market value at the first point of sale of 
  7.14  the production of each agricultural commodity for which a 
  7.15  minimum price is in effect.  
  7.16     Subd. 2.  [PAYMENT.] The commissioner shall establish the 
  7.17  procedure for the timely payment of the check-off fee by the 
  7.18  producer and publish notice of establishment of the procedure in 
  7.19  the State Register at the same time that notice of the 
  7.20  effectiveness of a minimum price is published under section 
  7.21  17.704, subdivision 2.  The check-off procedure is effective 
  7.22  upon approval by a majority of the producers voting in a 
  7.23  referendum held by the commissioner in the manner provided for a 
  7.24  promotional order under section 17.56, subdivision 3.  If a 
  7.25  referendum is conducted and the proposed check-off fee is not 
  7.26  approved, the commissioner shall not conduct another referendum 
  7.27  on any check-off fee for the same commodity until one year has 
  7.28  elapsed.  Establishment of the check-off procedure is not 
  7.29  subject to the administrative procedure act under chapter 14.  
  7.30  An outline of the proposed check-off procedure must be published 
  7.31  in the State Register with the emergency rule establishing the 
  7.32  minimum price for a commodity under section 17.704, subdivision 
  7.33  5.  The procedure must be fair and reasonable and the check-off 
  7.34  fee must be deducted by the first purchaser at the time of sale.
  7.35  The first purchaser shall send check-off fees to the 
  7.36  commissioner once every 30 days in accordance with the procedure 
  8.1   established by the commissioner.  
  8.2      The commissioner shall keep data used to establish the 
  8.3   check-off procedure.  Any person aggrieved by the procedure may 
  8.4   petition the district court of Ramsey county for judicial 
  8.5   review.  The data kept by the commissioner is the record for 
  8.6   judicial review.  
  8.7      Subd. 3.  [MINIMUM PRICE FUND; APPROPRIATION.] A minimum 
  8.8   price fund is established in the state treasury.  The 
  8.9   commissioner shall pay fees collected under sections 17.703 to 
  8.10  17.708 into the minimum price fund.  Interest earned by the fund 
  8.11  and any money appropriated to the commissioner for 
  8.12  administration of sections 17.703 to 17.708 must be credited to 
  8.13  the fund.  Money in the fund is annually appropriated to the 
  8.14  commissioner to administer sections 17.703 to 17.708, and to 
  8.15  repay any appropriation from the general fund.  
  8.16     Subd. 4.  [EXCESS MONEY.] If in any year the minimum price 
  8.17  fund exceeds projected administrative costs by $2,000,000, the 
  8.18  commissioner shall discontinue check-off fees the following year 
  8.19  and thereafter until the minimum price fund falls below 
  8.20  $500,000, at which time the commissioner shall give notice that 
  8.21  collection of the check-off fees will recommence the next year. 
  8.22  During biennial budget hearings in an odd-numbered year, the 
  8.23  commissioner shall report the projected administrative costs for 
  8.24  the next biennium under sections 17.703 to 17.708 to the 
  8.25  appropriate standing legislative committees dealing with finance 
  8.26  and appropriations.  
  8.27     Sec. 6.  [17.707] [EXEMPT TRANSACTIONS.] 
  8.28     Sections 17.703 to 17.708 do not apply to a producer who 
  8.29  sells a commodity directly to a consumer or processor outside of 
  8.30  the state, or to a person who sells a commodity for use as seeds.
  8.31     Sec. 7.  [17.708] [PENALTIES; ENFORCEMENT.] 
  8.32     Subdivision 1.  [PENALTIES.] A person may not buy from 
  8.33  another an agricultural commodity for less than the minimum 
  8.34  price which is effective at the time of purchase.  The penalty 
  8.35  for a violation is:  (1) a civil penalty equal to twice the 
  8.36  difference between the lower price paid and the minimum price 
  9.1   for the quantity of the commodity involved; and (2) revocation 
  9.2   for five years of any grain buyer's license issued under section 
  9.3   223.17 held by the offender.  The attorney general may bring an 
  9.4   action in district court to impose a penalty provided under this 
  9.5   section.  
  9.6      Subd. 2.  [INVESTIGATION; SETTLEMENT.] The commissioner 
  9.7   shall investigate any reported violation of this section.  If 
  9.8   the commissioner determines that a violation has occurred, the 
  9.9   commissioner may negotiate a settlement with the offending 
  9.10  party, including payment of a penalty in an amount at least the 
  9.11  difference between the lower price and the established minimum 
  9.12  price for the commodity involved.  If a settlement cannot be 
  9.13  reached within 60 days, the commissioner shall request the 
  9.14  attorney general to take other appropriate legal action.  
  9.15     Subd. 3.  [RESTRAINING ORDER.] The commissioner may seek a 
  9.16  temporary restraining order to restrain a violation of 
  9.17  subdivision 1 in the district court of Ramsey county.  The court 
  9.18  shall grant a temporary restraining order for ten working days 
  9.19  upon a showing by the commissioner that there is reason to 
  9.20  believe, based on specific evidence, that an ongoing violation 
  9.21  of subdivision 1 is occurring or that a violation may occur.  
  9.22     Sec. 8.  [EFFECTIVE DATE.] 
  9.23     Sections 1 to 7 are effective the day following final 
  9.24  enactment.