SENATE BILL NO. 183

INTRODUCED BY L. NELSON, E. BERGSAGEL

A BILL FOR AN ACT ENTITLED: "AN ACT REVISING LAWS REGARDING AGRICULTURAL SEED ; CLARIFYING LABELING REQUIREMENTS AND PACKAGING PROHIBITIONS; CLARIFYING AND REVISING DEFINITIONS; REVISING CERTAIN SEED DEALER LICENSING REQUIREMENTS AND FEES; ESTABLISHING REPORTING REQUIREMENTS AND AN ASSESSMENT ON SEED DEALERS LOCATED OUTSIDE MONTANA BASED ON GROSS ANNUAL SALES IN MONTANA; AMENDING SECTIONS 80-5-105, 80-5-110, 80-5-120, 80-5-121, 80-5-202, 80-5-206, 80-5-207, 80-5-208, 80-5-301, AND 80-5-305, MCA; REPEALING SECTIONS 80-5-102, 80-5-104, 80-5-107, 80-5-112, 80-5-113, AND 80-5-205, MCA; AND PROVIDING AN EFFECTIVE DATE."

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:

Section 1. Section 80-5-105, MCA, is amended to read:

"80-5-105. Prohibitions. (1) A person may not sell or transport for use in planting in this state any seed that:

(a) contains prohibited noxious weed seeds;

(b) contains restricted weed seeds in excess of

the maximum numbers per pound allowed under rules adopted by the department;

(c) contains in excess of 2% or more of weed seed;

(d) is offered or exposed for sale more than 12 calendar months from the last day of the month in which the germination test was completed. This 12-month limitation does not apply when seed is packaged in hermetically sealed containers within 12 months after harvest. The container must be conspicuously labeled in not less than 8-point type to indicate that:

(i) the container is hermetically sealed;

(ii) the seed has been preconditioned as to moisture content; and

(iii) the germination test is valid for a period not to exceed 18 months from the date of the germination test for seeds offered for sale on a wholesale basis and for a period not to exceed 36 months for seeds offered for sale at retail.

(e) is labeled, advertised, or otherwise represented as being certified seed of any class unless:

(i) it has been determined by a seed certifying agency that the seed conforms to standards of purity and identity as to kind, species (and subspecies, if appropriate), or variety; and

(ii) the seed bears an official label issued for that seed by a seed certifying agency certifying that the seed is of a specified class and a specified kind, species (and subspecies, if appropriate), or variety;

(f) is a variety for which a United States certificate of plant variety protection has been issued or applied for under the provisions of the Plant Variety Protection Act, 7 U.S.C. 2321, et seq., without the authority of the owner of the variety or is labeled with a variety name but not certified by an official seed certifying agency when it is a variety for which the certificate or application for "protection" specifies sale only as a class of certified seed, provided that seed from a certified lot may be labeled as to variety name when used in a mixture ;

(g) is not labeled in accordance with the provisions of this chapter and appurtenant rules or that has false or misleading labeling;

(h) has been falsely or misleadingly advertised.

(2) It is unlawful for a person within this state to:

(a) detach, alter, deface, or destroy any label provided for in this chapter or by rules promulgated pursuant to this chapter or to alter or substitute seed in a manner that may defeat the purposes of this chapter;

(b) disseminate any false or misleading advertisement concerning seed subject to the provisions of this chapter in any manner or by any means;

(c) hinder or obstruct, in any way, any authorized person in the performance of duties authorized under this chapter;

(d) fail or refuse to obtain a license when required pursuant to 80-5-202;

(e) fail to comply with a stop sale order or to move or otherwise handle or dispose of any lot of seed held under a stop sale order except with permission of the department and for the purpose specified in the stop sale order;

(f) fail to comply with any provisions of parts 1 and 2 of this chapter, including rules promulgated under those parts;

(g) use the word "trace" as a substitute for any required statement; or

(h) use the word "type" in any labeling in connection with the name of any agricultural seed variety."

Section 2. Section 80-5-110, MCA, is amended to read:

"80-5-110. Laboratory testing of samples -- fees. Any citizen of this state may request the seed laboratory to examine, analyze, and test samples of seed upon payment of the fee and compliance with rules governing the submission of seed samples for that service. Samples of seed analyzed and tested must be charged for at rates established by rule of the department as recommended by the agricultural experiment station. All fees collected by the seed laboratory must be used to defray the expenses incurred by the laboratory under this chapter."

Section 3. Section 80-5-120, MCA, is amended to read:

"80-5-120. Definitions. As used in this chapter, unless the context requires otherwise, the following definitions apply:

(1) "Advertisement" means a representation, other than a representation on the label, that is disseminated by any means and that relates to seed governed by the provisions of this chapter.

(2) "Agricultural seeds" means the seeds of grass, forage, cereal, fiber crops, and any other kinds of seeds commonly recognized within this state as agricultural seeds. The term includes lawn seeds and mixtures of seeds.

(3) "Approximate percentage" and "approximate number" mean the percentage or number with the variations above and below that value as allowed according to the tolerance limits defined in the rules for seed testing adopted by the association of official seed analysts.

(4) "Bulk" means not packaged in separate units.

(5) "Certifying agency" means:

(a) an agency authorized under the laws of a state, territory, or possession of the United States to officially certify seed and that has standards and procedures to ensure the genetic purity and identity of the seed certified; or

(b) an agency of a foreign country determined by the department to adhere to procedures and standards for seed certification that are comparable to those adhered to generally by the seed certifying agencies described in subsection (5)(a).

(6) "Conditioning" means drying, cleaning, scarifying, and other operations that could change the purity or germination of a seed and require the seed lot to be retested to determine labeling.

(7) "Controlling the pollination" means to use a method of hybridization that will produce pure seed that is at least 75% hybrid seed.

(8) "Dormant" means viable seeds, excluding hard seeds, that fail to germinate when provided the specified germination conditions for the seed in question.

(9) "Flower seeds" means seeds of herbaceous plants grown for their blooms, ornamental foliage, or other ornamental parts and that are commonly known and sold under the name of flower seeds in this state.

(10) "Genuine grower declaration" means a statement signed by the grower that indicates, for each lot of seed, the lot number, kind, variety, origin, weight, year of production, date, and destination of shipment.

(11) "Germination" means the emergence and development from the seed embryo as evidence of vitality when the seeds are subjected to the proper moisture and temperature conditions with proper aeration for the customary length of time for each specific kind of seed, as specified in the rules for seed testing adopted by the association of official seed analysts.

(12) "Hard seeds" means seeds that remain hard at the end of the prescribed test period because they have not absorbed water because of an impermeable seed coat.

(13) "Hybrid", as the term applies to varieties of seed, means the first generation seed of a cross produced by controlling the pollination and by combining:

(a) two or more inbred lines;

(b) one inbred or a single cross with an open pollinated variety; or

(c) two or more selected clones, seed lines, varieties, or species except open-pollinated varieties of corn (Zea mays). The second generation of subsequent generations from those crosses may not be regarded as hybrids. Hybrid designations must be treated as variety names.

(14) "Indigenous seeds" means the seeds of those plants that are naturally adapted to an area where the intended use is for revegetation of disturbed sites. These plants include grasses, forbs, shrubs, and legumes.

(15) "Inert matter" means all matter that is not seed, including broken seeds, sterile florets, chaff, fungus bodies, and stones as determined by methods defined by the association of official seed analysts.

(16) "Kind" means one or more related species or subspecies that are known singly or collectively by one common name, such as corn, oats, alfalfa, and timothy.

(17) "Labeling" means a tag or other device, attached to or written, stamped, or printed on a container or accompanying a lot of bulk seeds, that purports to set forth the information required on the seed label under [section 11] and that may include any other information relating to the labeled seed.

(18) "Lot" means a definite quantity of seed identified by a lot number or other mark, every portion of which is uniform within recognized tolerances for the factors that appear in the labeling.

(19) "Mixture" means seed consisting of more than one kind, each in excess of 5% by weight of the whole.

(20) "Montana certified seed grower" means a member of an authorized Montana seed certifying agency who has consented to produce seed under the rules for certified classes of seed, with respect to the maintenance of genetic purity and variety identity, set forth by the establishing agency.

(21) "Other crop seeds" means any agricultural, vegetable, or flower seeds other than the kind or variety of seed or the mixture of seeds included as pure seed.

(22) "Person" means an individual, firm, partnership, corporation, or association.

(23) "Prohibited noxious weed seeds" means the seeds of

plant species designated as noxious weeds under 7-22-2101(7)(a)(i).

(24) "Protected variety" means a variety for which a certificate has been issued by the United States plant variety protection office or for which an application for protection has been filed granting the owner or the owner's authorized agent exclusive rights in the sale and distribution of the variety.

(25) "Pure live seed" means the product of the percentage of germination plus hard seed or dormant seed multiplied by the percentage of pure seed, divided by 100, with the result expressed as a whole number.

(26) "Pure seed" means seed exclusive of inert matter and all other seeds not of the seed being considered, as determined by methods defined by the association of official seed analysts.

(27) "Restricted weed seeds" means the seeds of any plant that may adversely affect agriculture or the environment and that are designated as restricted weed seeds under rules adopted by the department.

(28) "Screening" means chaff, sterile florets, immature seed, weed seed, inert matter, and any other materials removed from seed by any kind of cleaning or conditioning.

(29) "Seed conditioning plant" means a place of business, whether a permanent or portable facility, that conditions seeds.

(30) "Seed dealer" means a person who sells seeds.

(31) "Seed labeler" means a person affixing labels to seeds, with that person's name, address, and other information as required in [section 11] .

(32) "Sell" means to offer for sale, expose for sale, have in possession for sale, exchange, barter, or trade. The term includes furnishing agricultural seed to growers for the production of a crop on contract.

(33) "Stop sale" means an administrative order provided by law that restrains the sale, use, disposition, and movement of a definite amount of seed.

(34) "Treated" means that seed has received an application of a substance or has been subjected to a process for which a claim is made.

(35) "Type" means a group of varieties so nearly similar that the individual varieties cannot be clearly differentiated except under special conditions.

(36) "Variety" means a subdivision of a kind that is:

(a) distinct, in the sense that the variety can be differentiated by one or more identifiable morphological, physiological, or other characteristics from all other varieties known publicly;

(b) uniform, in the sense that the variations in essential and distinctive characteristics are describable; and

(c) stable, in the sense that the variety will remain unchanged in its essential and distinctive characteristics and its uniformity when reproduced or reconstituted as required by the different categories of varieties.

(37) "Vegetable seeds" means seeds of those crops that are or may be grown in gardens or on truck farms and are or may be sold generally under the name of vegetable seeds or herbs.

(38) "Viable" means that seeds are capable of producing a normal seedling under optimum growing conditions after all forms of dormancy have been overcome, if present.

(39) "Weed seeds" means the seeds of all plants generally recognized as weeds within this state and includes noxious weed seeds."

Section 4. Section 80-5-121, MCA, is amended to read:

"80-5-121. Inspection. Consistent with the responsibilities of this chapter, authorized representatives of the department, upon presentation of department-issued credentials, may enter, at reasonable times or under emergency conditions, any public or private premises, including any vehicle of transport. The department may inspect or investigate, obtain samples, examine seeds and labels, inspect equipment, and review and copy records relating to distribution of seed or licensing requirements in Montana. Upon request, the department shall pay the current market value for each seed sample."

Section 5. Section 80-5-202, MCA, is amended to read:

"80-5-202. Licensing -- application -- fee. (1) All facilities located in the state that condition agricultural seed shall obtain a license from the department for each facility. However, a seed grower, when conditioning only seed from that grower's own production, is not required to be licensed under this part.

(2) Each seed conditioning plant must post in a conspicuous location in the facility:

(a) its fees for conditioning services; and

(b) the license for the facility.

(3) A person whose name and address appear on the label of agricultural seed sold in Montana, as required by [section 11], shall obtain a seed labeler's license from the department before doing business in Montana. The following persons, however, are excluded from the licensing requirements under this subsection:

(a) a Montana certified seed grower when labeling certified seed from that grower's own production;

(b) any person who updates germination test data by affixing to the package of seed a supplemental label bearing new germination data, the lot number, and the person's name and address; or

(c) a Montana grower who labels seed only of that labeler's own production with a gross annual sales value of $5,000 or less.

(4) A person who sells agricultural seed in Montana shall obtain a seed dealer's license from the department for each place where seed is located or sold, except for:

(a) a person who sells seed only in sealed packages of 10 pounds or less ;

(b) a person who sells seed that has a gross sales value of $1,000 or less a year;

(c) a person who sells seed only to a Montana-licensed seed dealer, labeler, or conditioner; or

(d) a Montana grower selling only seed of that grower's own production with a gross annual sales value of $5,000 or less.

(5) (a)

Each type of license for an in-state person costs $50 a year. .

(b) The license fee for an out-of-state person selling seed in Montana is $100 a year.

(c) The license fee for an out-of-state person who labels seed that is being sold in Montana is $50 a year.

(d) The license fee for a person who sells only lawn and turf grass seed is $50 a year.

(e) The license fee for a Montana grower who sells or labels only seed of that grower's own production is $50 a year.

(6) An application for a license under this section must be made in a manner and on forms provided by the department. The application must contain among other things:

(a) the location of each seed conditioning plant if the application is for a seed conditioning plant license;

(b) a sample label if the application is for a seed labeler license; and

(c) a list of persons selling seed if required by department rule.

(7) Seed dealers shall provide with all shipments of agricultural seed a bill of lading or other evidence of delivery that includes:

(a) the names of:

(i) the seed dealer;

(ii) the shipper, if other than the seed dealer;

(iii) the buyer; and

(iv) the receiver, if other than the buyer; and

(b) the destination where the seed will be first unloaded."

Section 6. Section 80-5-206, MCA, is amended to read:

"80-5-206. Rules -- promulgated by department. (1) The department is authorized to promulgate necessary rules as authorized by parts 1 and 2 of this chapter. All rules are to be promulgated in accordance with procedures as set forth in the Montana Administrative Procedure Act.

(2) Rules may address but are not limited to the following subjects:

(a) designation of kinds of seed as agricultural, vegetable, flower, or indigenous;

(b) designation of kinds of seed that must be labeled as to variety name;

(c) designation of kinds and varieties of flower seeds that may be labeled according to type and performance characteristics;

(d) standards for determining and stating pure live seed, germination, or viability;

(e) plants to be designated as weeds, restricted weeds, and prohibited weeds and standards for allowing weeds and restricted weeds in seeds;

(f) procedures for implementing the administrative provisions of 80-5-207;

(g) procedures for implementing and administering civil penalties, including establishing a penalty matrix that schedules the types of penalties, the amounts for initial and subsequent offenses, and any other matters necessary for the administration of civil penalties under 80-5-207;

(h) procedures for submitting applications for licensing and establishing the period for which licenses are issued under 80-5-202;

(i) minimum standards for equipment and handling procedures for facilities that require licensing, including sellers and distributors of agricultural seed, seed labelers, and conditioning plants;

(j) standards that restrict or exempt from restriction the holding and movement of screenings, when in the public interest;

(k) recordkeeping requirements for persons who handle agricultural, vegetable, flower, or indigenous seeds, including file samples of seed for each lot handled for a period of time up to 2 years.

(3) The department may promulgate rules related to the operation of the state seed laboratory. The rules may include but are not limited to procedures for submitting seed samples and rates charged for seed analysis."

Section 7. Section 80-5-207, MCA, is amended to read:

"80-5-207. Administration -- stop sale order -- violation -- cancellation of license -- enforcement . (1) The department shall administer and enforce the provisions of parts 1 and 2 of this chapter and the rules promulgated under those parts.

(2) The department may issue and enforce a written or printed stop sale order to the owner or custodian of any lot of seed that the department finds to be in violation of this chapter. The order shall prohibit further sale or movement of the seed until the department has evidence that this chapter has been complied with. Upon proper correction by reconditioning, labeling, or otherwise and when in the judgment of the department the requirements of this chapter have been met, the stop sale order must be lifted and the seed may be sold. If a violation cannot be corrected after adequate opportunity has been provided, the department may order the destruction of any lot of seed remaining in violation. An order for the destruction of a lot of seed is subject to the contested case provisions of Title 2, chapter 4, part 6.

(3) Distribution of seeds that are not legally labeled or failure to comply with this chapter or rules issued under its authority constitutes sufficient grounds for the department to cancel or deny a license to a licensee, provided that the licensee is given a reasonable opportunity to correct inadvertent and nonrecurring deficiencies.

(4) A person who violates or aids in the violation of any provision of this chapter or rules adopted under this chapter is subject to one or both of the following penalties:

(a) an administrative civil penalty of not more than $1,000 for each offense. Assessment of a penalty under this subsection (4)(a) may be made in conjunction with any other warning, order, or administrative action by the department under the authority of this part.

(b) a misdemeanor punishable by a fine of not less than $100 or more than $300 plus costs of prosecution for the first violation and not less than $500 or more than $1,000 plus costs of prosecution for each subsequent violation.

(5) The department shall establish by rule a penalty matrix that schedules the types of penalties, the amounts for initial and subsequent offenses, and any other matters necessary for the administration of civil penalties under subsection (4)(a). The issuance of a civil penalty is subject to the contested case procedures of Title 2, chapter 4, part 6.

(6) Nothing in this part may be construed as requiring the department or its representatives to report violations of parts 1 and 2 of this chapter when it believes that the public interest will be best served by a suitable notice of warning.

(7) It is the duty of each county attorney to whom any violation is reported to cause appropriate proceedings to be instituted and prosecuted in a court of competent jurisdiction without delay.

(8) The department is authorized to apply for and the court to grant a temporary or permanent injunction restraining any person from violating or continuing to violate any of the provisions of parts 1 and 2 of this chapter or any rule promulgated under parts 1 and 2 of this chapter notwithstanding the existence of other remedies at law. An injunction is issued without bond.

(9) Any person adversely affected by an act, order, or ruling made pursuant to the provisions of parts 1 and 2 of this chapter may within 30 days bring action in the district court of the county or any county where the alleged violation occurred for trial of the issues bearing upon the act."

Section 8. Section 80-5-208, MCA, is amended to read:

"80-5-208. Deposit of funds -- seed account. (1) There is an account in the state special revenue fund to be known as the seed account. All inspection, license, assessment, filing, and penalty fee revenue collected under this chapter must be deposited in the seed account. Funds received from any source, such as gifts, grants, cost-share funds, and other funds designated for purposes consistent with this chapter, may also be deposited in the seed account.

(2) Money received as revenue under this chapter not immediately required for the purposes of this chapter must be invested under the provisions of the unified investment program established in Title 17, chapter 6, part 2. All interest earned on the seed account must be deposited in the seed account."

Section 9. Section 80-5-301, MCA, is amended to read:

"80-5-301. Application of sections. A person, firm, association, or corporation that issues, uses, or circulates any certificate, advertisement, tag, seal, poster, letterhead, marking, circular, or written or printed representation or description pertaining to seeds or plant parts intended for propagation or sale or sold or offered for sale in which the words "Montana state certified", "state certified", "Montana certified", or "one year off certified" or similar words or phrases are used or employed is subject to 80-5-301 through 80-5-305."

Section 10. Section 80-5-305, MCA, is amended to read:

"80-5-305. Unlawful use of certification -- penalty. A person, firm, association, or corporation may not issue, make, use, or circulate any document purporting to be or represented as a seed or plant part certification certificate, represent seeds or plant parts as certified, or use the term "Montana state certified", "state certified", "Montana certified", or "one year off certified" or similar words or phrases, without the authority and approval of the university. A person, firm, association, or corporation who violates 80-5-301 through 80-5-305 is guilty of a misdemeanor and shall be fined not less than $100 or more than $500 for each offense."

NEW SECTION. Section 11. Label requirements for agricultural, vegetable, flower, and indigenous seeds. (1) Each container of agricultural, vegetable, flower, and indigenous seeds sold in this state for sowing purposes must bear a conspicuous, unaltered label or tag, plainly written or printed in English. Bulk sales must be accompanied by the required label information, which must be given to the seed purchaser. The following information, which may not be modified or denied in the labeling or on another label attached to the container, must be included on a label:

(a) name and address of the seed labeler;

(b) lot number identification;

(c) germination rate and date of germination test or a notation of the year for which the seed was packaged for sale;

(d) state or country of origin; and

(e) seed kind or variety. The department shall establish rules specifying the kinds of seed for which variety must be stated and the kinds of seeds for which the variety may be stated and when the words "variety not stated" may be used. Kinds of seeds not listed by department rule may be stated as kind only or as kind and variety.

(2) In addition to the required label information listed in subsection (1), the department shall establish by rule additional label requirements for agricultural seed, including grass, lawn, and turf seed, and for vegetable, flower, and indigenous seeds. The additional label requirements may include:

(a) percentage of kind or variety of each seed component present in a container;

(b) percentage of weed seed present, both restricted and common weed seed;

(c) amount of inert material present;

(d) warnings for treated seed; and

(e) requirements for coated seed, inoculated seed, seed that is below standard, seed sold in bulk, hybrid seed, seed mixtures, and seed in containers, mats, tapes, and other planting devices.

NEW SECTION. Section 12. Cooperation and agreements. The department may cooperate with and enter into agreements with other governmental agencies, universities, and private entities to carry out the provisions of this chapter.

NEW SECTION. Section 13. Assessment on sales into Montana -- reporting -- rulemaking. (1) Seed labelers located outside Montana who sell agricultural seed in Montana shall report those sales and pay a fee of 15 cents per $100 in gross annual sales of agricultural seed .

(2) The department shall by rule establish:

(a) reporting requirements, including persons who shall report, the form of reports, and the scope of information to be reported;

(b) the due date applicable to reports; and

(c) penalty provisions applicable to reports that are not received by the due date, not to exceed $10 or 10% of the assessment due, whichever is greater.

(3) Failure to submit the report as required or to pay the assessment in full constitutes a violation subject to the penalty provisions of this chapter.

NEW SECTION. Section 14. Exemptions. (1) The labeling requirements in [section 11] and the prohibitions in 80-5-105 do not apply to:

(a) seed or grain that is not intended for sowing purposes;

(b) seed in storage in or being transported or consigned to a cleaning or processing establishment for cleaning or processing if:

(i) the invoice or labeling accompanying that seed bears the statement "seeds for processing"; and

(ii) any labeling or representation made with respect to the uncleaned or unprocessed seed is subject to this chapter; and

(c) a carrier in respect to seed transported or delivered for transportation in the ordinary course of its business as a carrier, as long as the carrier is not engaged in producing, processing, or marketing seed that is subject to the provisions of this chapter.

(2) A person is not subject to the penalties in 80-5-207 for selling or offering for sale seeds subject to the provisions of this chapter that were incorrectly labeled or represented as to kind, species and subspecies (if appropriate), variety, type, origin, elevation, or year of collection (if required) when the seed cannot be identified by examination, unless the person has failed to obtain an invoice, genuine grower declaration, or other labeling information and has failed to take reasonable precautions to ensure the identity of the seeds. A genuine grower declaration of variety is considered an affirmation that the grower holds records of proof regarding parent seed, such as invoices and labels.

NEW SECTION. Section 15. Arbitration study. During the 1999-2000 interim, the department of agriculture shall conduct a study of the concept of arbitration as it applies to the seed industry. With input from the industry, the department shall investigate the feasibility of a department-sponsored arbitration program to assist in settling damage claims between seed buyers and seed sellers and report to the legislature regarding the results of the study. If an arbitration program is determined to be feasible, the department shall make recommendations to the 57th legislature regarding any legislation necessary to implement the arbitration concept. The study report and legislative recommendations, if any, must be presented to the legislature by September 1, 2000.

NEW SECTION. Section 16. Repealer. Sections 80-5-102, 80-5-104, 80-5-107, 80-5-112, 80-5-113, and 80-5-205, MCA, are repealed.

NEW SECTION. Section 17. Codification instruction. [Sections 11 through 14] are intended to be codified as an integral part of Title 80, chapter 5, part 1, and the provisions of Title 80, chapter 5, part 1, apply to [sections 11 through 14].

NEW SECTION. Section 18. Effective date. [This act] is effective July 1, 1999.

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