HF 447

1st Engrossment - 81st Legislature (1999 - 2000) Posted on 12/15/2009 12:00am

  1.1                          A bill for an act 
  1.2             relating to agriculture; prohibiting price 
  1.3             discrimination in certain livestock transactions; 
  1.4             requiring offers and bids in certain contracts to be 
  1.5             open and public; requiring certain reports; providing 
  1.6             for enforcement; amending Minnesota Statutes 1998, 
  1.7             section 31B.02, by adding a subdivision; proposing 
  1.8             coding for new law in Minnesota Statutes, chapter 31B. 
  1.9   BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.10     Section 1.  Minnesota Statutes 1998, section 31B.02, is 
  1.11  amended by adding a subdivision to read: 
  1.12     Subd. 7a.  [OFFERED OR BID IN AN OPEN, PUBLIC 
  1.13  MANNER.] "Offered or bid in an open, public manner" means that 
  1.14  the offer or bid is made in a forum (1) to which both potential 
  1.15  buyers and potential sellers in general have access; (2) 
  1.16  designed to solicit more than one blind bid; and (3) that allows 
  1.17  sellers and buyers to witness bids made and accepted.  An 
  1.18  example of an offer or bid in an open, public manner is a 
  1.19  forward contract that could be traded in an electronic market to 
  1.20  which both livestock sellers and buyers in general have access. 
  1.21     Sec. 2.  [31B.32] [PRICE DISCRIMINATION PROHIBITED.] 
  1.22     A packer purchasing or soliciting livestock for slaughter 
  1.23  in this state may not discriminate in prices paid or offered to 
  1.24  be paid to sellers of that livestock.  This section does not 
  1.25  apply to the sale and purchase of livestock if the following 
  1.26  requirements are met: 
  1.27     (1) the price differential is based on the quality of the 
  2.1   livestock, if the packer purchases or solicits the livestock 
  2.2   based upon a payment method specifying prices paid for criteria 
  2.3   relating to carcass merit, actual and quantifiable costs related 
  2.4   to transporting and acquiring the livestock by the packer, or an 
  2.5   agreement for the delivery of livestock at a specified date or 
  2.6   time; and 
  2.7      (2) after making a differential payment to a seller, the 
  2.8   packer publishes information relating to the differential 
  2.9   pricing, including the payment method for carcass merit, 
  2.10  transportation and acquisition pricing, and an offer to enter 
  2.11  into an agreement for the delivery of livestock at a specified 
  2.12  date or time according to the same terms and conditions offered 
  2.13  to other sellers.  
  2.14     Sec. 3.  [31B.33] [OPEN BIDS.] 
  2.15     All contracts used by a packer for purchase of slaughter 
  2.16  livestock must be offered or bid in an open, public manner. 
  2.17     Sec. 4.  [31B.34] [DAILY PRICE REPORTS.] 
  2.18     At the close of each business day on which a packer 
  2.19  purchased or received on contract livestock for slaughter, the 
  2.20  packer must report to the United States Department of 
  2.21  Agriculture, agricultural marketing service, livestock market 
  2.22  news branch, and the Minnesota commissioner of agriculture a 
  2.23  summary of all prices paid for livestock during that business 
  2.24  day, including prices paid on contract and for open market 
  2.25  purchases. 
  2.26     Sec. 5.  [31B.35] [VIOLATIONS.] 
  2.27     Any agreement made by a packer in violation of section 
  2.28  31B.02, subdivision 7a; 31B.32; or 31B.33 is voidable.  
  2.29  Violation of these sections is fraud. 
  2.30     Sec. 6.  [31B.36] [QUARTERLY REPORTS; COMMISSIONER 
  2.31  PUBLICATION OF TERMS AND PRICE.] 
  2.32     (a) A packer that acquires livestock for slaughter under 
  2.33  contract with one or more producers shall, within ten business 
  2.34  days after the close of each calendar quarter, provide a report 
  2.35  to the commissioner.  The report must include copies of each 
  2.36  type of forward contract, marketing agreement, production 
  3.1   contract, and joint venture agreement used by the packer to 
  3.2   procure slaughter livestock from producers during the previous 
  3.3   calendar quarter.  The report must also include copies of any 
  3.4   contract the packer intends to use in the upcoming quarter. 
  3.5      (b) Not later than 15 business days after packers have 
  3.6   provided reports required under paragraph (a), the commissioner 
  3.7   shall release to the agricultural press and other interested 
  3.8   parties a summary report of the contract terms and prices 
  3.9   offered by packers to producers during the previous calendar 
  3.10  quarter.  
  3.11     Sec. 7.  [31B.37] [VIOLATIONS; ENFORCEMENT.] 
  3.12     The attorney general shall enforce sections 31B.02, 
  3.13  subdivision 7a, and 31B.32 to 31B.36.  The commissioner of 
  3.14  agriculture shall refer violations of these sections to the 
  3.15  attorney general.  The attorney general or any person injured by 
  3.16  a violation of this section may bring an action in district 
  3.17  court to restrain a packer from violating this section.  A 
  3.18  seller who receives a discriminatory price or who is offered 
  3.19  only a discriminatory price for livestock based upon a violation 
  3.20  of sections 31B.02, subdivision 7a, and 31B.32 to 31B.36 by a 
  3.21  packer has a civil cause of action against the packer.  The 
  3.22  department shall refer to the attorney general any packer or 
  3.23  packer's agent who the department believes is in violation of 
  3.24  the provisions of sections 31B.02, subdivision 7a, and 31B.32 to 
  3.25  31B.36.  The attorney general may, upon referral from the 
  3.26  department, file an action in district court to enforce these 
  3.27  sections.