SENATE BILL NO. 18
INTRODUCED BY L. NELSON, K. OHS
AN ACT ENABLING MONTANA AGRICULTURAL COMMODITY GROUPS TO ADOPT COMMODITY CHECKOFF PROGRAMS FOR THE PURPOSE OF CONDUCTING COMMODITY RESEARCH AND MARKET DEVELOPMENT PROGRAMS; PROVIDING FOR A COMMODITY GROUP REFERENDUM PROCESS TO ADOPT OR ELIMINATE CHECKOFF PROGRAMS; PROVIDING FOR CREATION OF COMMODITY ADVISORY COMMITTEES AND SETTING OUT COMMITTEE DUTIES; CREATING AN ACCOUNT AND PROVIDING FOR EXPENDITURE AND INVESTMENT OF ACCOUNT FUNDS; PROVIDING PENALTIES; STATUTORILY APPROPRIATING CHECKOFF PROGRAM FUNDS; AMENDING SECTION 17-7-502, MCA; AND PROVIDING AN IMMEDIATE EFFECTIVE DATE.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
Section 1. Short title. [Sections 1 through 13] may be cited as the "Agricultural Commodity Research and Market Development Enabling Act".
Section 2. Findings -- purpose. (1) The legislature finds that:
(a) agriculture is the leading industry in Montana, based on cash receipts, and that agricultural commodities are resources of the first magnitude in the economy of Montana residents;
(b) agricultural commodities are prime factors in the production of wealth and in the development and stabilization of property values and of activities and enterprises that form the bases and sources of important contributions by taxation to the public revenue; and
(c) Montana agricultural commodities enter a world market that is highly competitive in character.
(2) In order to protect and foster the health, prosperity, and general welfare of the people of Montana, it is declared to be the public policy of this state to encourage and promote intensive, scientific, and practical research into all phases of agricultural commodity culture, production, marketing, and use and into the development of markets for commodities grown or produced in Montana.
Section 3. Definitions. As used in [sections 1 through 13], unless the context requires otherwise, the following definitions apply:
(1) "Advisory committee" means a committee created by the department under authority of [section 5] for the purpose of advising the department on the implementation and administration of a commodity research and market development program established in [section 7].
(2) "Commercial channels" means the sale of agricultural commodities for any use when sold to:
(a) a commercial buyer, dealer, processor, or cooperative;
(b) a person, public or private, who resells any agricultural commodity or product produced from crops grown in Montana; or
(c) a first purchaser in Montana.
(3) "Commodity" means any agricultural crop, forage used by livestock, livestock, bird, fish, or value-added agricultural product that is grown or produced in or imported into Montana.
(4) "First purchaser" means a person, public or private, corporation, association, or partnership that buys, accepts for shipment, or otherwise acquires the property in or to agricultural commodities from a grower or producer. The term includes a mortgagee, pledgee, lienor, or other person, public or private, that has a claim against a grower or producer, when the actual or constructive possession of a commodity is taken as part payment or in satisfaction of a mortgage, pledge, lien, or claim.
(5) "Grower" or "producer" means a person or landowner who is personally engaged in growing or producing agricultural commodities, a tenant of the landowner who is personally engaged in growing or producing commodities, or both the landowner and the tenant jointly. The term includes a person, partnership, association, corporation, cooperative, trust, sharecropper, and all other business units, devices, and arrangements.
(6) "Person" means a natural person, individual, firm, partnership, association, corporation, company, or organized group of persons and any trustee, receiver, assignee, or similar representative.
(7) "Sale" includes any mortgage or pledge of agricultural commodities to a person, public or private.
Section 4. Powers of department -- rulemaking. (1) In consultation with respective commodity advisory committees, the department may:
(a) adopt commodity research and market development programs pursuant to [section 7];
(b) adopt rules necessary for the implementation and administration of [sections 1 through 13] and commodity research and market development programs;
(c) hire employees or enter into contracts or agreements for the administration of commodity research and market development programs;
(d) enter into reciprocal agreements with analogous agricultural commodity research and market development programs outside of Montana for the collection and transfer of assessments on commodities sold across state borders;
(e) conduct audits of first purchaser commodity businesses to ensure collection and payment of commodity assessments in accordance with [section 10];
(f) place stop purchase or sale orders on commodities and apply for and obtain injunctions against first purchaser commodity businesses when it is determined that the first purchaser has not been collecting and paying required commodity assessments in accordance with [section 10];
(g) provide for the enforcement of [sections 1 through 13];
(h) provide for the conduct of marketing and research into the production and uses of agricultural commodities;
(i) enter into contracts or agreements with units of the Montana university system and other university systems and other organizations, public or private, for purposes of:
(i) improving commodity quality;
(ii) increasing the efficiency of production;
(iii) developing marketing knowledge and markets;
(iv) determining new uses for commodities;
(v) developing alternative and rotation crops; and
(vi) carrying out all research and market development contemplated by [sections 1 through 13].
(2) In administering the provisions of [sections 1 through 13], the department may adopt rules establishing guidelines for:
(a) the petition and hearing process regarding adoption or elimination of commodity research and market development programs as set out in [sections 7 and 8];
(b) the creation of commodity advisory committees as set out in [section 5];
(c) the adoption, collection, and enforcement of commodity assessments as set out in [sections 9 and 10];
(d) policies and procedures for administration of commodity research and market development programs suggested by commodity advisory committees pursuant to [section 6]; and
(e) conducting or contracting for commodity research and market development projects and guidelines for procedures for entering into reciprocal agreements with analogous commodity research and market development programs outside of Montana, as contemplated in this section.
Section 5. Creation of commodity advisory committees. (1) The department may create commodity advisory committees.
(2) Each advisory committee created under this section must be known as the "... advisory committee".
(3) The department shall prescribe the composition and advisory functions of each advisory committee created and appoint advisory committee members, who shall serve at the pleasure of the director. The majority of members on a crop or livestock commodity advisory committee must be producers of the commodity.
(4) Unless the advisory committee member is a full-time salaried officer or employee of this state or of any political subdivision of this state, each member is entitled to be paid an amount to be determined by the department, not to exceed the daily amount established in 2-15-122(5) for each day in which the member is actually and necessarily engaged in the performance of advisory committee duties. Each member is also entitled to be reimbursed for travel expenses, as provided for in 2-18-501 through 2-18-503, incurred while in the performance of advisory committee duties. Members who are full-time salaried officers or employees of this state or of any political subdivision of this state are not entitled to be compensated for their service as members, but are entitled to be reimbursed for travel expenses as provided for in 2-18-501 through 2-18-503.
(5) Unless otherwise specified by the department, at its first meeting each year, each advisory committee shall elect a presiding officer and other officers whom it considers necessary.
(6) Unless otherwise specified by the department, each advisory committee shall meet at least annually. An advisory committee shall also meet on the call of the department and may meet at other times on the call of the presiding officer or a majority of its members.
(7) A majority of the membership of an advisory committee constitutes a quorum to do business.
(8) In order for the creation of an advisory committee to be effective, the governor shall file in the governor's office and in the office of the secretary of state a record of the advisory committee created showing the advisory committee's:
(a) name, in accordance with subsection (2);
(b) composition;
(c) names and addresses of the appointed members; and
(d) purpose.
Section 6. Duties of commodity advisory committees. (1) Each commodity advisory committee created in [section 5] shall advise the department regarding:
(a) policies and procedures to be followed by the department when administering a commodity research and market development program associated with each respective advisory committee;
(b) adoption of rules implementing and administering respective commodity research and market development programs;
(c) annual assessments on agricultural commodities associated with a respective research and market development program;
(d) assessment collection and enforcement procedures to be followed with each respective research and market development program; and
(e) the awarding of research and marketing contracts.
(2) None of the powers or duties provided for in [sections 1 through 13] permit participation in state or federal political action by an advisory committee.
Section 7. Adoption of commodity research and market development program -- petition -- hearing. The department shall adopt commodity research and market development programs subject to the following:
(1) Twenty-five or more producers of a commodity may petition the department to adopt a research and market development program. The format, information required, and criteria of valid petitions must be established by department rule.
(2) Within 60 days of receipt and verification of a qualified petition, the department shall hold a hearing to receive relevant input from growers, producers, and first purchasers regarding the proposed commodity research and market development program.
(3) After considering the facts and information received at the hearing, the department may hold a referendum of affected growers and producers. The referendum must include, among other informational items, the amount of the assessment and the method of collection. The referendum must be by paper ballot mailed to the last-known address of known growers and producers of the relevant commodity, obtained from lists provided by the petitioner and other sources known to the department. To be eligible to vote on a referendum, an individual must be a producer who is 18 years of age or older and a Montana resident.
(4) Based on the facts and information from the hearing and an affirmative majority referendum vote, the department shall adopt a commodity research and market development program. In doing so, the department shall appoint an advisory committee in accordance with [section 5].
Section 8. Elimination of commodity research and market development program -- petition -- hearing. The department shall eliminate a commodity research and market development program subject to the following:
(1) After 2 years from the date on which a commodity research and market development program is adopted, the department may, upon its own accord or upon receipt of a verified petition from 15% or more of the growers or producers of a commodity requesting elimination of a research and market development program, call a hearing to determine if the program should be eliminated. The format, information required, and criteria of valid petitions must be established by department rule.
(2) After considering the facts and information received at the hearing, the department may, within 60 days of the hearing, hold a referendum of affected growers and producers. The referendum must be by paper ballot mailed to the last-known address of known growers and producers of the relevant commodity, obtained from lists provided by the petitioner and other sources known to the department. To be eligible to vote on a referendum, an individual must be a producer who is 18 years of age or older and a Montana resident.
(3) Based on a majority referendum vote in favor of elimination, the department shall repeal all rules and administrative procedures and policies associated with the relevant commodity research and market development program and dissolve the associated advisory committee.
(4) All funds of a former commodity research and market development program remaining in the account established in [section 12] revert to the general fund.
Section 9. Annual commodity assessment -- collection. (1) The department, in consultation with each commodity advisory committee, shall, for each commodity associated with a research and marketing program, adopt by rule an annual assessment on program commodities grown, delivered, or stored in Montana and sold through commercial channels.
(2) The assessments are levied and imposed:
(a) at the time of first sale of any commodity by a seller and must be collected by the first purchaser of the commodity from the seller at the time of each settlement for the commodity purchased;
(b) in the case of a mortgage or pledge of a commodity as security for a loan under any federal price support program, other than the commodity credit corporation, at the time that the loan is made and must be collected by the agency or person making the loan by deducting the amount of the assessment from the proceeds of the loan;
(c) in the case of a commodity pledged under the federal commodity credit corporation, at the time of purchase and must be collected at the time of purchase, not at the time that a lease or loan is made under the program; or
(d) as otherwise provided by department rule for the specific research or market development program.
(3) The assessments levied under the provisions of this section must be deducted and collected as provided by [sections 1 through 13], whether the commodity is stored in Montana or any other state. The assessment attaches to each transaction, but a seller is not subject to assessment more than once regardless of the number of times that the commodity is the subject of a sale, mortgage, pledge, or other transaction. The assessment is imposed and attaches on the initial sale, mortgage, pledge, or other transaction in which the commodity seller parts with title to the commodity or creates some interest in the commodity in a mortgagee, pledgee, or other person.
(4) If the first purchaser is a foreign entity, the producer shall make a good faith effort to ensure that the assessment is collected as provided in this section and paid to the department as provided in [section 10].
Section 10. Delivery of invoice -- form -- filing of sworn statement -- payment of assessment -- refund. (1) The first purchaser of a commodity at the time of sale or the mortgagee, pledgee, or other lender at the time of the loan or advance shall give separate invoices for each purchase, delivery, or storage charge to the seller or person delivering the commodity or entering it into storage. The invoices must be on forms approved by the department and must show:
(a) the name and address of the seller or of the person delivering the commodity or entering it into storage;
(b) the name and address of the purchaser or the lender;
(c) the quantity of commodity sold, mortgaged, pledged, delivered, or stored; and
(d) the date of the purchase, mortgage, pledge, delivery, or storage and the amount of assessment collected and remitted to the department.
(2) (a) Within 20 days after the end of a month in which a first purchaser purchases a commodity or in which a lender makes a loan or advance on a commodity, the first purchaser, mortgagee, or pledgee shall file with the department, on forms prescribed by the department, a sworn statement of:
(i) the quantity of a commodity purchased in Montana;
(ii) the quantity mortgaged or pledged or otherwise transferred or liened as security for a loan during the preceding calendar month; or
(iii) the quantity delivered or stored.
(b) At the time that the sworn statement is filed, the first purchaser or lender shall pay to the department the assessment provided for in [section 9] for deposit in the appropriate account in the state special revenue fund.
(3) The statements referred to in subsections (1) and (2) must be legible and without corrections or erasures. A person may not alter any part of a statement.
(4) If the first purchaser fails to pay the department the assessment prescribed in subsection (2) within 60 days, the amount of the uncollected assessment must be considered a lien upon the assets of the first purchaser. The department, in its discretion, may:
(a) suspend or revoke any license authorizing the first purchaser to purchase the commodity;
(b) place a stop purchase or stop sale order on commodities being purchased by the first purchaser;
(c) apply for and obtain an injunction; or
(d) seek a penalty set forth in [section 13].
(5) After 30 days and before 90 days following the deduction of the assessment by the first purchaser or the first lender under [section 9] or as otherwise provided by department rule, the seller may, upon the submission of a written, verified request to the department, obtain a refund of the assessment. The request must be accompanied by the original invoices received by the seller at the time of settlement. The department shall keep complete records of all refunds made under the provisions of this section for 2 years after the refund is made, after which records of refunds may be destroyed. All original invoices must be returned to the seller with the refund payment.
Section 11. Receipt of gifts, grants, and donations for research and marketing purposes. The department may receive gifts, grants, and donations for any commodity research and market development conducted pursuant to [sections 1 through 13].
Section 12. Account established -- sources -- use -- expenditures. (1) There is an account in the state special revenue fund into which must be placed:
(a) the proceeds of all commodity assessments and penalties collected under [sections 1 through 13]; and
(b) the proceeds from all gifts, grants, and donations to the department for commodity research and market development received under [section 11].
(2) Funds deposited in the account for a specific commodity research and market development program may be expended only for the purposes of that program.
(3) Money deposited in the account is statutorily appropriated, as provided in 17-7-502, to the department for purposes of [sections 1 through 13].
(4) The department may direct the board of investments to invest funds from the account pursuant to the provisions of the unified investment program for state funds. Income from the investments must be credited to the account.
(5) The department may assess costs for the services that it provides to each commodity research and market development program. However, the costs assessed must be commensurate to the cost of the services provided.
Section 13. Penalty for violation. A person who violates any provision of [sections 1 through 13] is guilty of a misdemeanor and upon conviction shall be fined an amount not less than $25 or more than $1,000. All fines collected must be deposited as provided in [section 12].
Section 14. Section 17-7-502, MCA, is amended to read:
"17-7-502. (Temporary) Statutory appropriations -- definition -- requisites for validity. (1) A statutory appropriation is an appropriation made by permanent law that authorizes spending by a state agency without the need for a biennial legislative appropriation or budget amendment.
(2) Except as provided in subsection (4), to be effective, a statutory appropriation must comply with both of the following provisions:
(a) The law containing the statutory authority must be listed in subsection (3).
(b) The law or portion of the law making a statutory appropriation must specifically state that a statutory appropriation is made as provided in this section.
(3) The following laws are the only laws containing statutory appropriations: 2-17-105; 3-5-901; 5-13-403; 10-3-203; 10-3-310; 10-3-312; 10-3-314; 10-4-301; 15-1-111; 15-23-706; 15-30-195; 15-31-702; 15-36-324; 15-36-325; 15-37-117; 15-38-202; 15-65-121; 15-70-101; 16-1-404; 16-1-406; 16-1-411; 16-11-308; 17-3-106; 17-3-212; 17-3-222; 17-6-101; 17-7-304; 18-11-112; 19-3-319; 19-6-709; 19-9-702; 19-13-604; 19-17-301; 19-18-512; 19-19-305; 19-19-506; 20-8-107; 20-8-111; 20-26-1503; 22-3-1004; 23-5-136; 23-5-306; 23-5-409; 23-5-610; 23-5-612; 23-5-631; 23-7-301; 23-7-402; 37-43-204; 37-51-501; 39-71-503; 39-71-907; 39-71-2321; 42-2-105; 44-12-206; 44-13-102; 50-4-623; 53-6-703; 53-24-206; 67-3-205; 75-1-1101; 75-5-1108; 75-6-214; 75-11-313; 77-1-131; 80-2-103; 80-2-222; 80-4-416; [section 12]; 81-5-111; 82-11-161; 85-20-402; 87-1-513; 90-3-301; 90-4-215; 90-6-331; and 90-9-306.
(4) There is a statutory appropriation to pay the principal, interest, premiums, and costs of issuing, paying, and securing all bonds, notes, or other obligations, as due, that have been authorized and issued pursuant to the laws of Montana. Agencies that have entered into agreements authorized by the laws of Montana to pay the state treasurer, for deposit in accordance with 17-2-101 through 17-2-107, as determined by the state treasurer, an amount sufficient to pay the principal and interest as due on the bonds or notes have statutory appropriation authority for the payments. (In subsection (3): pursuant to sec. 7, Ch. 567, L. 1991, the inclusion of 19-6-709 terminates upon death of last recipient eligible for supplemental benefit; pursuant to sec. 7(2), Ch. 29, L. 1995, the inclusion of 15-30-195 terminates July 1, 2001; pursuant to sec. 5, Ch. 461, L. 1997, the inclusion of 77-1-131 terminates October 1, 2003; and pursuant to secs. 13, 16(1), Ch. 549, L. 1997, the inclusion of 90-3-301 terminates July 1, 1999.)
17-7-502. (Effective July 1, 2008) Statutory appropriations -- definition -- requisites for validity. (1) A statutory appropriation is an appropriation made by permanent law that authorizes spending by a state agency without the need for a biennial legislative appropriation or budget amendment.
(2) Except as provided in subsection (4), to be effective, a statutory appropriation must comply with both of the following provisions:
(a) The law containing the statutory authority must be listed in subsection (3).
(b) The law or portion of the law making a statutory appropriation must specifically state that a statutory appropriation is made as provided in this section.
(3) The following laws are the only laws containing statutory appropriations: 2-17-105; 3-5-901; 5-13-403; 10-3-203; 10-3-310; 10-3-312; 10-3-314; 10-4-301; 15-23-706; 15-30-195; 15-31-702; 15-36-324; 15-36-325; 15-37-117; 15-38-202; 15-65-121; 15-70-101; 16-1-404; [16-1-406;] 16-1-411; 16-11-308; 17-3-106; 17-3-212; 17-3-222; 17-5-404; 17-5-804; 17-6-101; 17-7-304; 18-11-112; 19-3-319; 19-6-709; 19-9-702; 19-13-604; 19-17-301; 19-18-512; 19-19-205; 19-19-305; 19-19-506; 20-8-107; 20-9-361; 20-26-1503; 22-3-1004; 23-5-136; 23-5-306; 23-5-409; 23-5-610; 23-5-612; 23-5-631; 23-7-301; 23-7-402; 32-1-537; 37-43-204; 37-51-501; 39-71-503; 39-71-907; 39-71-2321; 42-2-105; 44-12-206; 44-13-102; 50-4-623; 50-5-232; 50-40-206; 53-6-150; 53-6-703; 53-24-206; 60-2-220; 67-3-205; 75-1-1101; 75-5-1108; 75-6-214; 75-5-1108; 75-6-214; 75-11-313; 77-1-505; 80-2-103; 80-2-222; 80-4-416; [section 12]; 81-5-111; 82-11-136; 82-11-161; 85-1-220; 85-20-402; 87-1-513; 90-4-215; 90-6-331; 90-7-220; 90-7-221; and 90-9-306.
(4) There is a statutory appropriation to pay the principal, interest, premiums, and costs of issuing, paying, and securing all bonds, notes, or other obligations, as due, that have been authorized and issued pursuant to the laws of Montana. Agencies that have entered into agreements authorized by the laws of Montana to pay the state treasurer, for deposit in accordance with 17-2-101 through 17-2-107, as determined by the state treasurer, an amount sufficient to pay the principal and interest as due on the bonds or notes have statutory appropriation authority for the payments. (In subsection (3): pursuant to sec. 7, Ch. 567, L. 1991, the inclusion of 19-6-709 terminates upon death of last recipient eligible for supplemental benefit; and pursuant to sec. 68(2), Ch. 422, L. 1997, this version becomes effective July 1, 2008.)"
Section 15. Codification instruction. [Sections 1 through 13] are intended to be codified as an integral part of Title 80, chapter 11, and the provisions of Title 80, chapter 11, apply to [sections 1 through 13].
Section 16. Effective date. [This act] is effective on passage and approval.
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