1.1                          A bill for an act 
  1.2             relating to agriculture; providing for associations of 
  1.3             producers; setting dispute resolution procedures; 
  1.4             establishing an advisory committee; amending Minnesota 
  1.5             Statutes 1996, sections 13.99, subdivision 6d; 17.692; 
  1.6             17.693, subdivisions 1, 2, and 6; 17.694, subdivisions 
  1.7             1, 2, 3, 6, and 7; 17.696, subdivision 2; 17.697; 
  1.8             17.698; 17.70, subdivisions 1, 2, and 3; 17.701; 
  1.9             proposing coding for new law in Minnesota Statutes, 
  1.10            chapter 17; repealing Minnesota Statutes 1996, section 
  1.11            17.699. 
  1.12  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.13     Section 1.  Minnesota Statutes 1996, section 13.99, 
  1.14  subdivision 6d, is amended to read: 
  1.15     Subd. 6d.  [AGRICULTURAL PRODUCER ASSOCIATION AND COMMODITY 
  1.16  HANDLERS.] Access to data filed with the commissioner of 
  1.17  agriculture by agricultural producer associations and 
  1.18  agricultural commodity handlers is governed by section 17.694, 
  1.19  subdivision 1. 
  1.20     Sec. 2.  Minnesota Statutes 1996, section 17.692, is 
  1.21  amended to read: 
  1.22     17.692 [DECLARATION OF POLICY.] 
  1.23     ~~Since~~ Agricultural products are produced ~~by numerous and~~ 
  1.24  ~~often scattered individual producers, the marketing and~~ 
  1.25  ~~bargaining position of individual producers will be adversely~~ 
  1.26  ~~affected unless they are free to join together voluntarily in~~ 
  1.27  ~~cooperative associations or other associations as authorized by~~ 
  1.28  ~~law.  Membership of a producer in such a cooperative association~~ 
  2.1   ~~or other association can only be meaningful if a handler of~~ 
  2.2   ~~agricultural products is required to bargain in good faith with~~ 
  2.3   ~~an agricultural cooperative association or other association as~~ 
  2.4   ~~the representative of the members of such association.~~  
  2.5   ~~Production and marketing of agricultural commodities constitutes~~ 
  2.6   ~~a basic and essential industry.  Agricultural producers do not~~ 
  2.7   ~~now enjoy the opportunity, comparable to that of industrial~~ 
  2.8   ~~workers and those in many other forms of enterprise or~~ 
  2.9   ~~employment, to organize and bargain effectively.  Neither is~~ 
  2.10  ~~adequate government provision available to assure that the~~ 
  2.11  ~~bargaining process shall be fair both to producers and handlers~~ 
  2.12  ~~and in the public interest.~~ in Minnesota by many individual 
  2.13  farmers, ranchers, and handlers scattered throughout the state.  
  2.14  The efficient production and marketing of agricultural products 
  2.15  by farmers, ranchers, and handlers is of vital concern to their 
  2.16  welfare and to the general economy of Minnesota.  The marketing 
  2.17  and bargaining position of individual farmers, ranchers, and 
  2.18  handlers will be adversely affected unless they are free to join 
  2.19  together voluntarily in cooperative organizations as authorized 
  2.20  by law.  Interference with this right is contrary to the public 
  2.21  interest, adversely affects the free and orderly flow of goods 
  2.22  in interstate and foreign commerce, and affects the welfare of 
  2.23  the people of Minnesota.  It is, therefore, declared to be the 
  2.24  policy of this state and the purpose of this chapter to 
  2.25  establish standards of fair practices required of handlers and 
  2.26  producers in their dealings in agricultural products and to 
  2.27  encourage settlement of disputes between handlers and producers 
  2.28  of agricultural products. 
  2.29     Sec. 3.  Minnesota Statutes 1996, section 17.693, 
  2.30  subdivision 1, is amended to read: 
  2.31     Subdivision 1.  [SCOPE.] For the purposes of sections 
  2.32  17.691 to ~~17.701~~ 17.703, the terms defined in this section have 
  2.33  the meanings given them.  
  2.34     Sec. 4.  Minnesota Statutes 1996, section 17.693, 
  2.35  subdivision 2, is amended to read: 
  2.36     Subd. 2.  [ASSOCIATION; ASSOCIATION OF PRODUCERS.] 
  3.1   "Association" or "association of producers" means an association 
  3.2   of producers~~, or federation of cooperative association of~~ 
  3.3   ~~producers engaged in producing, marketing, bargaining, shipping~~ 
  3.4   ~~or processing functions of an agricultural commodity~~ of 
  3.5   agricultural commodities engaged in marketing, bargaining, 
  3.6   shipping, or processing an agricultural commodity into 
  3.7   agricultural products on behalf of its members who are producers 
  3.8   of ~~such~~ the agricultural commodity, which has been accredited by 
  3.9   the commissioner.  
  3.10     Sec. 5.  Minnesota Statutes 1996, section 17.693, 
  3.11  subdivision 6, is amended to read: 
  3.12     Subd. 6.  [HANDLER.] "Handler" means a person, other than 
  3.13  an association, engaged in the business or practice of acquiring 
  3.14  agricultural commodities from producers or associations for 
  3.15  processing or sale; grading, packaging, handling, storing, or 
  3.16  processing agricultural commodities received from producers or 
  3.17  associations; contracting or negotiating contracts or other 
  3.18  arrangements with or on behalf of producers or associations with 
  3.19  respect to the production of any agricultural commodity; or 
  3.20  acting as an agent or broker for a handler in the performance of 
  3.21  any function or act specified above.  It does not include a 
  3.22  producer who sells at a retail establishment which the producer 
  3.23  owns and operates or who sells at a produce market, agricultural 
  3.24  commodities produced by the producer and agricultural 
  3.25  commodities produced by another producer subject to value 
  3.26  limitation established by the commissioner.  
  3.27     Sec. 6.  Minnesota Statutes 1996, section 17.694, 
  3.28  subdivision 1, is amended to read: 
  3.29     Subdivision 1.  [PROCEDURES.] Any association accredited 
  3.30  under this section may engage in bargaining as provided for 
  3.31  under sections 17.691 to ~~17.701~~ 17.703.  
  3.32     (1) An association desiring accreditation shall file with 
  3.33  the commissioner in the form required by the commissioner.  The 
  3.34  request shall contain properly certified evidence that the 
  3.35  association meets the standards for accreditation and shall be 
  3.36  accompanied by a report of the names and addresses of member 
  4.1   producers, the name of each handler to whom the member producer 
  4.2   delivered or contracted to deliver the agricultural commodity 
  4.3   during the previous two calendar years ~~and the quantity~~ 
  4.4   ~~delivered or acreage grown~~.  A fee to cover the costs of the 
  4.5   commissioner in processing the request shall be established 
  4.6   pursuant to chapter 14, and paid by the association when the 
  4.7   request is filed.  
  4.8      (2) The commissioner shall notify all handlers named in the 
  4.9   request for accreditation of an association of producers.  The 
  4.10  notice must be sent to the handlers named in the request by 
  4.11  first class mail within ten days of the commissioner receiving 
  4.12  the request for accreditation.  The commissioner shall maintain 
  4.13  records indicating the date of mailing. 
  4.14     ~~(2)~~ (3) The commissioner may require all handlers of an 
  4.15  agricultural commodity produced in a bargaining unit area as 
  4.16  individuals ~~or through their trade association~~ to file ~~with the~~ 
  4.17  ~~board~~ within 30 days following ~~such~~ a request, a report, 
  4.18  properly certified, showing the correct names and addresses of 
  4.19  all producers of the agricultural commodity who have delivered 
  4.20  the agricultural commodity to the handler during the two 
  4.21  calendar years preceding the filing of the report ~~and the~~ 
  4.22  ~~quantities of the agricultural commodity received by the handler~~ 
  4.23  ~~from each named producer during those periods.  The information~~ 
  4.24  ~~contained in the individual reports of handlers filed with the~~ 
  4.25  ~~commissioner shall not be made public by the commissioner nor~~ 
  4.26  ~~available to any person for private use~~.  
  4.27     (4) Data submitted to the commissioner by producer 
  4.28  associations under clause (1) and by commodity handlers under 
  4.29  clause (3) are private data on individuals or nonpublic data, as 
  4.30  defined in section 13.02, subdivision 9 or 12. 
  4.31     Sec. 7.  Minnesota Statutes 1996, section 17.694, 
  4.32  subdivision 2, is amended to read: 
  4.33     Subd. 2.  [BARGAINING UNIT DETERMINATION.] In determination 
  4.34  of accreditation, the commissioner shall determine ~~whether~~ the 
  4.35  appropriate bargaining ~~shall be appropriate~~ unit by plant, 
  4.36  ~~processor, or company~~ but may define the bargaining unit by 
  5.1   processor or company if there is a history of identical 
  5.2   contracts offered to producers on a processor or company-wide 
  5.3   basis.  This determination shall be the unit area for the 
  5.4   bargaining provisions of sections 17.691 to ~~17.701~~ 17.703 as is 
  5.5   applicable to associations and handlers.  In making a 
  5.6   determination, the commissioner shall define as appropriate 
  5.7   the ~~largest~~ bargaining unit area in terms of the ~~quantity of the~~ 
  5.8   agricultural commodity produced, the definition of the 
  5.9   agricultural commodity, geographic area covered, and number of 
  5.10  producers included as is consistent with the following criteria: 
  5.11     ~~(a)~~ (1) the community of interest of the producers 
  5.12  included; 
  5.13     ~~(b)~~ (2) the potential serious conflicts of interests among 
  5.14  members of the proposed unit; 
  5.15     ~~(c)~~ (3) the effect of exclusions on the capacity of the 
  5.16  association to effectively bargain for the bargaining unit as 
  5.17  defined; 
  5.18     ~~(d)~~ (4) the kinds, types, and subtypes of products to be 
  5.19  classed together as agricultural commodity for which the 
  5.20  bargaining unit is proposed; 
  5.21     ~~(e)~~ (5) whether the producers eligible for membership in 
  5.22  the proposed bargaining unit meet the definition of "producer" 
  5.23  for the agricultural commodity involved; 
  5.24     ~~(f)~~ (6) the wishes of the producers; and 
  5.25     ~~(g)~~ (7) the pattern of past marketing of the commodity.  
  5.26     Sec. 8.  Minnesota Statutes 1996, section 17.694, 
  5.27  subdivision 3, is amended to read: 
  5.28     Subd. 3.  [STANDARDS.] An association shall be accredited 
  5.29  only if it complies with the following: 
  5.30     (a) The association meets the requirements of the 
  5.31  Capper-Volstead Act, United States Code, title 7, section 291-2. 
  5.32     (b) The association has submitted a copy of its bylaws 
  5.33  which provide that:  Each member of the association shall have 
  5.34  one vote in all votes of the membership of the association; that 
  5.35  officers or directors shall be elected by a majority of the 
  5.36  members voting or by delegates representing a majority of the 
  6.1   membership; and that all elections shall be by secret ballot.  
  6.2      (c) The association would have marketing and bargaining 
  6.3   contracts for the current or next marketing year with more than 
  6.4   50 percent of the producers of an agricultural commodity who are 
  6.5   in the bargaining unit area ~~and these contracts would cover more~~ 
  6.6   ~~than 50 percent of the quantity of that commodity produced by~~ 
  6.7   ~~producers in that bargaining unit area.  The commissioner may~~ 
  6.8   ~~determine the quantity produced by the bargaining unit area~~ 
  6.9   ~~using information on production in the prior year, current~~ 
  6.10  ~~marketing information, and projections on production during the~~ 
  6.11  ~~current marketing year.  The commissioner shall exclude from the~~ 
  6.12  ~~quantity of the agricultural commodity contracted by producers~~ 
  6.13  ~~with producer owned and controlled processing cooperatives and~~ 
  6.14  ~~any quantity produced by handlers~~.  An association whose main 
  6.15  purpose is bargaining but which processes a surplus into a form 
  6.16  which is not the subject of bargaining is not a processing 
  6.17  cooperative.  The contracts with members shall specify the 
  6.18  agricultural commodity and that the members have appointed the 
  6.19  association as their exclusive agent in negotiations with 
  6.20  handlers for prices and other terms of trade with respect to the 
  6.21  sale and marketing of the agricultural commodity and obligate 
  6.22  the members of the association to dispose of their production or 
  6.23  holdings of the agricultural commodity through or at the 
  6.24  direction of the association.  
  6.25     Sec. 9.  Minnesota Statutes 1996, section 17.694, 
  6.26  subdivision 6, is amended to read: 
  6.27     Subd. 6.  [REVOCATION.] The commissioner shall consider 
  6.28  revocation of accreditation upon any of the following conditions:
  6.29     (a) Upon receipt of a request from an accredited 
  6.30  association for its own disaccreditation.  
  6.31     (b) Upon receipt of a petition requesting that the 
  6.32  accredited association be disaccredited and bearing the 
  6.33  signatures of at least ten percent of the producers of an 
  6.34  accredited association in the bargaining unit.  Within ten days 
  6.35  following the receipt of a petition bearing the signatures of at 
  6.36  least ten percent of the producers of an accredited association 
  7.1   in a bargaining unit ~~the board shall order~~, the commissioner ~~to~~ 
  7.2   ~~initiate~~ shall order a referendum, to take place at least seven 
  7.3   days but not more than 20 days after the order, among the 
  7.4   members of the accredited association and if in the referendum ~~a~~ 
  7.5   ~~majority of the producers, producing 50 percent of the commodity~~ 
  7.6   50 percent of association members approve, the association 
  7.7   accreditation shall be revoked by the ~~board~~ commissioner.  The 
  7.8   commissioner shall have representatives of the department 
  7.9   present at the referendum vote to conduct the referendum and 
  7.10  take action to prevent unfair practices by the association of 
  7.11  producers or handlers to obstruct or influence voting.  
  7.12  Tabulation of the vote is the responsibility of the department.  
  7.13  The department may adopt rules governing any referendum for 
  7.14  repeal of accreditation.  A request for a revocation of 
  7.15  accreditation may occur only during the first three months of a 
  7.16  marketing year. 
  7.17     Sec. 10.  Minnesota Statutes 1996, section 17.694, 
  7.18  subdivision 7, is amended to read: 
  7.19     Subd. 7.  [REPRESENTATION.] The accredited association 
  7.20  shall represent all member producers who are in the bargaining 
  7.21  unit area and it shall act as exclusive sales agents for 
  7.22  the members of the accredited association in the bargaining unit 
  7.23  area in negotiations with handlers.  The association may not 
  7.24  assess, bargain for, or claim to represent those producers who 
  7.25  choose not to be represented by the association or choose not to 
  7.26  have a bargaining committee bargain for them.  
  7.27     Sec. 11.  Minnesota Statutes 1996, section 17.696, 
  7.28  subdivision 2, is amended to read: 
  7.29     Subd. 2.  [UNFAIR PRACTICES.] An association shall not 
  7.30  engage nor permit an employee or agent to engage in the 
  7.31  following practices, defined as unfair practices: 
  7.32     ~~(a) To~~ (1) coerce a producer in the exercise of the right 
  7.33  to join and belong to or to refrain from joining or belonging to 
  7.34  an association or refuse to deal with a producer because of the 
  7.35  exercise of the right to join and belong to or refrain from 
  7.36  joining an association; 
  8.1      (2) enter into a contract which discriminates against a 
  8.2   producer represented by that association~~.~~; 
  8.3      ~~(b) To~~ (3) act in a manner contrary to the bylaws of the 
  8.4   association~~.~~; 
  8.5      ~~(c) To~~ (4) coerce or intimidate a handler to breach, 
  8.6   cancel, or terminate an agreement or marketing contract with an 
  8.7   association or a contract with a producer~~.~~; 
  8.8      ~~(d) To~~ (5) make or circulate unsubstantiated reports about 
  8.9   the finances, management, or activities of other associations or 
  8.10  handlers~~.~~; or 
  8.11     ~~(e) To~~ (6) conspire, combine, agree, or arrange with 
  8.12  another person to do or aid or abet the doing of any practice 
  8.13  which is in violation of sections 17.691 to ~~17.701~~ 17.703.  
  8.14     Sec. 12.  Minnesota Statutes 1996, section 17.697, is 
  8.15  amended to read: 
  8.16     17.697 [~~BARGAINING DEFINED; NOTICE OF COMMENCEMENT OF~~ 
  8.17  ~~NEGOTIATIONS; MEDIATION PROCEDURE~~ INFORMATIONAL EXCHANGES; 
  8.18  DISPUTE RESOLUTION.] 
  8.19     Subdivision 1.  [DEFINITION.] As used in sections 17.691 to 
  8.20  ~~17.701~~ 17.703, ~~"bargaining"~~ "informational exchange" means the 
  8.21  mutual obligation of a handler and an association or their 
  8.22  designated representatives to meet at ~~reasonable times and~~ 
  8.23  ~~confer and negotiate in good faith.  Negotiations may include~~ 
  8.24  ~~all terms relative to trading between handlers and producers of~~ 
  8.25  ~~the agricultural commodity such as~~ a mutually agreed upon time 
  8.26  in conformance with sections 17.691 to 17.703 and confer and 
  8.27  provide information about their expectations for the upcoming 
  8.28  marketing year.  The informational exchange must be a serious, 
  8.29  fair, and reasonable attempt to reach agreement by acknowledging 
  8.30  or refuting with reason points brought up by either party with 
  8.31  respect to the terms and conditions of a contract relative to 
  8.32  trading between handlers and producers of the agricultural 
  8.33  commodity.  The topics may include, but are not limited to, the 
  8.34  following: 
  8.35     ~~(a)~~ (1) prices and terms of sale; 
  8.36     ~~(b)~~ (2) quality specifications; 
  9.1      ~~(c)~~ (3) quantity to be marketed by acreage or weight; 
  9.2      ~~(d)~~ (4) transactions involving products and services 
  9.3   utilized by one party and provided by the other party; and 
  9.4      ~~(e)~~ (5) check off procedures pursuant to assessments levied 
  9.5   by the association~~, not to exceed one-half of one percent of the~~ 
  9.6   ~~gross value of the producers annual production contract are~~ 
  9.7   ~~collected by handlers from proceeds to producers within the~~ 
  9.8   ~~bargaining unit and paid to the association~~ whereby a portion of 
  9.9   the producers' annual production payments under a contract are 
  9.10  collected by handlers from producers within the bargaining unit 
  9.11  and paid to the association on some other arrangement.  
  9.12     Subd. 2.  [FIRST TWO MEETINGS.] ~~The association shall~~ 
  9.13  ~~notify the commissioner of the commencement of negotiations.~~ The 
  9.14  handler and an association of producers or their designated 
  9.15  representatives shall meet at least two times for informational 
  9.16  exchanges prior to 60 days before the beginning of the marketing 
  9.17  year.  Neither party, however, is required to disclose 
  9.18  proprietary business or financial records or information.  Both 
  9.19  parties shall inform the department in writing of the time of 
  9.20  both informational exchanges at least ten days prior to the 
  9.21  first meeting.  Verification of completion of training in 
  9.22  negotiation, as described in section 17.702, must be included 
  9.23  with the notification sent to the commissioner. 
  9.24     Subd. 3.  [CONTINUING NEGOTIATIONS.] ~~(a) If no agreement is~~ 
  9.25  ~~reached at the expiration of ten days after service of such~~ 
  9.26  ~~notice to the commissioner, the association may, at any time~~ 
  9.27  ~~thereafter, petition the commissioner to assume supervision over~~ 
  9.28  ~~the dispute, except as provided for by clause (e).~~  
  9.29     ~~(b) The commissioner shall then set a time and place for~~ 
  9.30  ~~conference with the parties to present facts representing each~~ 
  9.31  ~~party's case and hearing arguments.  The commissioner shall take~~ 
  9.32  ~~such steps, in accordance with rules promulgated under sections~~ 
  9.33  ~~17.691 to 17.701, as the commissioner deems expedient to affect~~ 
  9.34  ~~a voluntary, amicable and expeditious adjustment and settlement~~ 
  9.35  ~~of the differences between the handler and the association.~~  
  9.36     ~~(c) At any time prior to 15 days before the first day of~~ 
 10.1   ~~the marketing year in dispute, if an agreement on the issues in~~ 
 10.2   ~~dispute between the association and the handler has not been~~ 
 10.3   ~~reached, the handler may elect not to purchase, directly or~~ 
 10.4   ~~indirectly, any quantity of the agriculture commodity produced~~ 
 10.5   ~~by the association during that marketing year; or, the affected~~ 
 10.6   ~~producers may elect not to sell, directly or indirectly, any~~ 
 10.7   ~~quantity of the agricultural commodity produced by the~~ 
 10.8   ~~association during that marketing year; or, the affected~~ 
 10.9   ~~producers may elect not to sell, directly or indirectly, any~~ 
 10.10  ~~quantity of the agricultural commodity to the handler during~~ 
 10.11  ~~that marketing year.~~  
 10.12     ~~(d) If either party makes an election, the other party is~~ 
 10.13  ~~not under an obligation to continue bargaining with the party so~~ 
 10.14  ~~electing for terms during the marketing period in dispute.  Both~~ 
 10.15  ~~parties may, however, engage immediately in bargaining for the~~ 
 10.16  ~~following marketing year.~~  
 10.17     ~~(e) If the petition requesting the commissioner to assume~~ 
 10.18  ~~supervision over a dispute is presented 15 days or less before~~ 
 10.19  ~~the marketing year in dispute, then the commissioner shall~~ 
 10.20  ~~exercise discretionary authority, according to rules promulgated~~ 
 10.21  ~~under sections 17.691 to 17.701, in determining which disputes~~ 
 10.22  ~~are arbitrable before the start of the marketing year in dispute.~~
 10.23  After the conclusion of the second informational exchange and no 
 10.24  agreement is reached, negotiations may continue between the 
 10.25  parties at mutually agreed upon times.  Mediation may be 
 10.26  requested in accordance with this section by any party. 
 10.27     Subd. 4.  [AGREEMENT NOT REQUIRED.] The parties may reach 
 10.28  agreement for a contract during the informational exchanges.  
 10.29  However, the obligation to meet for informational exchanges does 
 10.30  not require either party to agree to a proposal, to make a 
 10.31  concession, or to enter into a contract. 
 10.32     Subd. 5.  [IF NO AGREEMENT IS REACHED.] If an agreement is 
 10.33  not reached during the informational exchanges, negotiations 
 10.34  must be considered to continue and either party may request 
 10.35  mediation as provided in this section.  Negotiations may 
 10.36  continue without mediation and an agreement may be reached 
 11.1   without the use of mediation.  Negotiations must be a serious, 
 11.2   fair, and reasonable attempt to reach agreement by acknowledging 
 11.3   or refuting with reason points brought up by either party with 
 11.4   respect to the terms and conditions of a contract relative to 
 11.5   trading between handlers and producers of the agricultural 
 11.6   commodity.  A request for mediation requires both parties to the 
 11.7   negotiation to complete the mediation process described in this 
 11.8   section, but does not obligate either party to agree to a 
 11.9   proposal, to make a concession, or to enter into a contract.  
 11.10  However, the parties are required to perform according to any 
 11.11  agreement reached at the conclusion of the mediation process. 
 11.12     Subd. 6.  [MEDIATION REQUEST.] An association of producers 
 11.13  or a handler may request mediation only within ten days after 
 11.14  the second informational exchange meeting.  Written notice 
 11.15  requesting mediation must be mailed to the commissioner and 
 11.16  postmarked within ten days of the second informational exchange, 
 11.17  with a copy to the nonrequesting party, and the notice for 
 11.18  mediation must contain the last offer made by the party 
 11.19  requesting mediation.  Within three days after receiving the 
 11.20  request for mediation, the commissioner shall require the 
 11.21  nonrequesting party to provide reasons for rejecting the last 
 11.22  offer made by the requesting party and revisions to the last 
 11.23  offer that might be required to reach an agreement.  The 
 11.24  nonrequesting party will have five days from the date of the 
 11.25  postmark to provide a response to the commissioner and also 
 11.26  provide a copy of the response to the requesting party.  The 
 11.27  commissioner shall request the American Arbitration Association 
 11.28  or a comparable dispute resolution organization to make 
 11.29  available a list of at least three qualified mediators, but not 
 11.30  more than six, for the parties to select one individual to 
 11.31  mediate the dispute.  Qualified mediators are those who have met 
 11.32  the training requirements of Rule 114.12 of the Minnesota 
 11.33  General Rules of Practice for the District Courts, are familiar 
 11.34  with sections 17.691 to 17.703, and have served as mediator in 
 11.35  at least three other commercial disputes or have commensurate 
 11.36  experience.  The handler and the association may agree on a 
 12.1   mediator or, failing agreement, the commissioner may select the 
 12.2   mediator from the list provided by allowing each party to strike 
 12.3   one mediator and choosing one from the remaining names on the 
 12.4   list. 
 12.5      Subd. 7.  [MEDIATION RULES.] The American Arbitration 
 12.6   Association mediation rules must be followed during the 
 12.7   mediation process.  If there is a conflict between those rules 
 12.8   and this statute, the statute prevails.  Any information shared 
 12.9   in the mediation process or offers to settle are to be 
 12.10  considered confidential and must not be used against either 
 12.11  party in any other proceeding, court action, or dispute 
 12.12  resolution process unless otherwise discoverable from outside of 
 12.13  the mediation process.  
 12.14     Subd. 8.  [DURATION OF MEDIATION.] The mediation process 
 12.15  must conclude not more than 20 days after the mediator has been 
 12.16  selected and notified by the department.  If the mediator feels 
 12.17  that additional time may result in an agreement between the 
 12.18  parties, the mediator may extend the mediation process for an 
 12.19  additional five days.  However, the mediation must conclude, 
 12.20  under any circumstance, no later than 15 days prior to the start 
 12.21  of the marketing year, unless the parties agree to a different 
 12.22  date, but no later than the first day of the marketing year. 
 12.23     Subd. 9.  [MEDIATION COSTS.] All costs for retaining a 
 12.24  mediator and proceedings during the mediation process must be 
 12.25  shared equally by both parties. 
 12.26     Subd. 10.  [SUBPOENAS.] The commissioner has the subpoena 
 12.27  authority to compel participation in the mediation process for 
 12.28  either party after the informational exchanges. 
 12.29     Subd. 11.  [ENFORCEABILITY.] Any final written agreement 
 12.30  reached during the mediation procedure is enforceable under the 
 12.31  law and in the courts of this state.  The parties are not 
 12.32  required to reach an agreement, but they are required to proceed 
 12.33  through the mediation process as outlined in this section. 
 12.34     Subd. 12.  [BINDING ARBITRATION.] If an agreement is not 
 12.35  reached during the mediation process, and upon written consent 
 12.36  by both parties, binding arbitration as set forth in this 
 13.1   chapter may be used to create a contract or resolve the dispute. 
 13.2      Subd. 13.  [NOTIFICATION.] The parties shall each notify 
 13.3   the commissioner after the end of the mediation period, if an 
 13.4   agreement has not been reached, of their desire to use binding 
 13.5   arbitration to settle the dispute.  An arbitrator must be 
 13.6   selected as provided in subdivision 18.  The notification must 
 13.7   include its final offer in which it shall identify all matters 
 13.8   as to which the parties agree with contractual language setting 
 13.9   forth these agreements and all matters as to which the parties 
 13.10  do not agree with contractual language setting forth the party's 
 13.11  final offer for resolution of those disagreements. 
 13.12     Subd. 14.  [PROCESS.] For all matters submitted to 
 13.13  arbitration, the arbitrator may choose between the final offers 
 13.14  of the parties or fashion a different solution between, but not 
 13.15  exceeding, the final offers of the parties.  If the parties 
 13.16  reach an agreement on the matters under arbitration before the 
 13.17  arbitrator issues a decision, they may submit a joint final 
 13.18  offer that the arbitrator shall accept and render as the 
 13.19  decision.  The arbitrator may hold hearings and administer 
 13.20  oaths, examine witnesses and documents, take testimony and 
 13.21  receive evidence, and issue subpoenas to compel the attendance 
 13.22  of witnesses and the production of records.  A person who fails 
 13.23  to obey the subpoena of an arbitrator may be punished for 
 13.24  contempt of court on application by the arbitrator to the 
 13.25  district court for the county in which the failure occurs.  The 
 13.26  arbitrator may use other information in addition to that 
 13.27  provided by or elicited from the parties.  The arbitrator shall 
 13.28  issue a decision within ten days of he commencement of 
 13.29  arbitration and that decision is binding on the parties.  If the 
 13.30  parties reach an agreement on the matters in the arbitrator's 
 13.31  decision prior to signing the contract, they may submit a joint 
 13.32  final offer to the arbitrator.  The arbitrator shall rescind the 
 13.33  previous decision and accept and render the joint final offer as 
 13.34  the decision. 
 13.35     Subd. 15.  [CONTRACT.] Within five days after the 
 13.36  arbitrator's decision, the handler shall prepare a contract that 
 14.1   must include all terms agreed to by the parties in bargaining or 
 14.2   awarded in arbitration and shall present the contract to the 
 14.3   association of producers who must accept the terms of the 
 14.4   contract within five days of its presentation. 
 14.5      Subd. 16.  [LIST OF ARBITRATORS.] The commissioner, in 
 14.6   consultation with the American Arbitration Association or 
 14.7   comparable dispute resolution organization, shall establish a 
 14.8   list of arbitrators who are qualified by education, training, 
 14.9   and experience to carry out the responsibilities of an 
 14.10  arbitrator under this section. 
 14.11     Subd. 17.  [COSTS OF ARBITRATION.] All costs of arbitration 
 14.12  must be borne equally by the parties.  The arbitrator shall 
 14.13  submit a statement of charges and expenses to the parties and to 
 14.14  the commissioner.  Each party shall pay the arbitrator directly. 
 14.15     Subd. 18.  [SELECTION OF ARBITRATOR.] The arbitrator must 
 14.16  be selected by the commissioner.  The commissioner shall submit 
 14.17  a list composed of the names of three persons knowledgeable in 
 14.18  the marketing of the agricultural commodity from which the 
 14.19  arbitrator must be chosen.  Qualified arbitrators are those who 
 14.20  have met the training requirements of Rule 114.12 of the 
 14.21  Minnesota General Rules of Practice for the District Courts, are 
 14.22  familiar with sections 17.691 to 17.703, and have served as an 
 14.23  arbitrator in at least three other commercial disputes or have 
 14.24  commensurate experience.  The selection must be made by the 
 14.25  association representative and the handler representative, each 
 14.26  striking one name from the list.  If two names remain, the 
 14.27  commissioner shall decide which one is the arbitrator. 
 14.28     Sec. 13.  Minnesota Statutes 1996, section 17.698, is 
 14.29  amended to read: 
 14.30     17.698 [~~BASIS FOR MEDIATION AND BARGAINING DECISIONS~~ 
 14.31  FACTORS TO BE CONSIDERED IN MEDIATION AND ARBITRATION.] 
 14.32     All decisions of mediation and ~~bargaining~~ arbitration which 
 14.33  result from section 17.697 ~~shall be based upon~~ must consider the 
 14.34  following factors: 
 14.35     ~~(a)~~ (1) prices or projected prices for the agricultural 
 14.36  commodity paid by the competing handlers in the market area or 
 15.1   competing market areas~~.~~ worldwide; 
 15.2      ~~(b)~~ (2) amount of the commodity produced or projections of 
 15.3   production in the production area or competing marketing areas~~.~~ 
 15.4   worldwide; 
 15.5      ~~(c)~~ (3) relationship between the quantity produced and the 
 15.6   quantity handled by the handler~~.~~; 
 15.7      ~~(d)~~ (4) the producers cost of production including the cost 
 15.8   which would be involved in paying farm labor a fair wage rate 
 15.9   and providing them with adequate housing~~.~~; 
 15.10     ~~(e)~~ (5) the efficiency of farm operations of similar size 
 15.11  and the projected prices of alternative agricultural commodities 
 15.12  grown in the market area; 
 15.13     (6) the cost of production of similar sized handlers; 
 15.14     (7) the average consumer prices for goods and services, 
 15.15  commonly known as the cost of living~~.~~; 
 15.16     ~~(f)~~ (8) the component of the agricultural commodity that 
 15.17  makes up the producer's income; 
 15.18     (9) the impact of the award on the competitive position of 
 15.19  the handler in the marketing area or competing areas~~.~~ worldwide; 
 15.20     ~~(g)~~ (10) the impact of the award on the competitive 
 15.21  position of the agricultural commodity in relationship to 
 15.22  competing commodities~~.~~; 
 15.23     ~~(h)~~ (11) a fair return on investment~~.~~; 
 15.24     ~~(i)~~ (12) kind, quality, or grade of the commodity 
 15.25  involved~~.~~; 
 15.26     ~~(j)~~ (13) stipulation of the parties~~.~~; and 
 15.27     ~~(k) such~~ (14) other factors which are normally or 
 15.28  traditionally taken into consideration in determining prices, 
 15.29  quality, quantity, and the costs of other services involved.  
 15.30     Sec. 14.  Minnesota Statutes 1996, section 17.70, 
 15.31  subdivision 1, is amended to read: 
 15.32     Subdivision 1.  For the purpose of sections 17.691 to 
 15.33  ~~17.701~~ 17.703, the commissioner may receive complaints with 
 15.34  respect to violations or threatened violations.  The 
 15.35  commissioner may make all necessary investigations, examinations 
 15.36  or inspections of any violation or threatened violation 
 16.1   specified in the sworn complaint filed with the commissioner.  
 16.2   If, upon such investigation, the commissioner considers that 
 16.3   there is reasonable cause to believe that the person charged has 
 16.4   committed a practice in violation of sections 17.691 to ~~17.701~~ 
 16.5   17.703, the commissioner shall issue and cause to be served a 
 16.6   complaint upon the person.  The complaint shall summon the 
 16.7   person to a hearing before the commissioner at the time and 
 16.8   place fixed.  
 16.9      Sec. 15.  Minnesota Statutes 1996, section 17.70, 
 16.10  subdivision 2, is amended to read: 
 16.11     Subd. 2.  If the commissioner determines that the person 
 16.12  complained of has committed a practice in violation of sections 
 16.13  17.691 to ~~17.701~~ 17.703, the commissioner shall state findings 
 16.14  of fact and shall issue and cause to be served on the person an 
 16.15  order to cease the violation and shall order further affirmative 
 16.16  action as will effectuate the policies of sections 17.691 
 16.17  to ~~17.701~~ 17.703.  
 16.18     Sec. 16.  Minnesota Statutes 1996, section 17.70, 
 16.19  subdivision 3, is amended to read: 
 16.20     Subd. 3.  If the commissioner is of the opinion that the 
 16.21  person complained of has not committed a practice in violation 
 16.22  of sections 17.691 to ~~17.701~~ 17.703, the commissioner shall make 
 16.23  findings of fact and issue an order dismissing the complaint.  
 16.24     Sec. 17.  Minnesota Statutes 1996, section 17.701, is 
 16.25  amended to read: 
 16.26     17.701 [RULES.] 
 16.27     The commissioner may promulgate rules necessary for the 
 16.28  administration of sections 17.691 to ~~17.701~~ 17.703 in accordance 
 16.29  with sections 17.691 to ~~17.701~~ 17.703 and chapter 14.  
 16.30     Sec. 18.  [17.702] [NEGOTIATION CLASSES REQUIRED.] 
 16.31     Upon accreditation of an association of producers, at least 
 16.32  two members of bargaining teams from both the association and 
 16.33  the handler named in the application must attend instructional 
 16.34  classes covering negotiation, mediation, arbitration, and 
 16.35  facilitation approved by the commissioner.  The instruction 
 16.36  period must be at least three hours.  The informational 
 17.1   exchanges may not commence unless certificates of completion are 
 17.2   on file with the commissioner.  After an association has been 
 17.3   accredited for a period exceeding one year, the association and 
 17.4   the handler must have at least one member of their bargaining 
 17.5   team in informational exchanges or negotiations complete 
 17.6   training in the previous year of at least three hours in 
 17.7   negotiation, mediation, arbitration, and facilitation, as 
 17.8   described in this section, before the dates for informational 
 17.9   exchanges are determined.  Verification of training must 
 17.10  accompany the notification to the commissioner that 
 17.11  informational exchanges are scheduled. 
 17.12     Sec. 19.  [17.703] [ADVISORY COMMITTEE.] 
 17.13     The commissioner shall establish an agricultural marketing 
 17.14  and bargaining advisory committee to monitor and review the 
 17.15  implementation and effectiveness of sections 17.691 to 17.703.  
 17.16  The commissioner shall appoint three producer representatives 
 17.17  and three handler representatives to the committee.  The 
 17.18  commissioner or the commissioner's representative shall chair 
 17.19  the committee.  The committee shall meet at least once within 
 17.20  two years of establishment.  Additional meetings shall be held 
 17.21  upon request by the commissioner.  The committee shall issue a 
 17.22  status report to the commissioner on the implementation of 
 17.23  sections 17.691 to 17.703.  The appointment, membership terms, 
 17.24  compensation, and removal of committee members are governed by 
 17.25  section 15.059.  The committee expires on June 30, 2002. 
 17.26     Sec. 20.  [REPEALER.] 
 17.27     Minnesota Statutes 1996, section 17.699, is repealed.