REPRESENTATIVES Schlichter, McGregor, Fessler, Gibbs, Collier, Aslanides, Wolpert, Seaver, Reinhard

To amend sections 926.16, 926.17, 926.18, 926.19, and

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926.32 of the Revised Code to revise the statutes

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governing the Agricultural Commodity Depositors

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Fund.

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BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:

Section 1. That sections 926.16, 926.17, 926.18, 926.19, and	5
926.32 of the Revised Code be amended to read as follows:	6

Sec. 926.16.  (A) There is hereby created in the state	7
treasury the agricultural commodity depositors fund. The state	8
shall not be held liable for any claims presented against the fund	9
under section 926.18 of the Revised Code. The fund shall consist	10
of a per-bushel fee remitted by licensed handlers under this	11
section, any sums that the director of agriculture may collect by	12
any legal action on behalf of the fund, and any property or	13
securities acquired through the use of moneys in the fund. All	14
investment earnings of the fund shall be credited to the fund. The	15
moneys collected under this section and deposited in the fund	16
shall be used exclusively to indemnify depositors as provided in	17
section 926.18 of the Revised Code and for no other purposeto pay	18
the examination and administrative costs of this chapter as	19
provided in division (E) of this section.	20

(B) All licensed handlers shall remit the fee determined by	21
the director in accordance with section 926.17 of the Revised Code	22
on:	23

(1) All agricultural commodities delivered to them for	24
storage under a bailment agreement or for sale, exchange, or	25
negotiation or solicitation of sale by depositors who produced	26
them or caused them to be produced;	27

(2) All agricultural commodities delivered to them for	28
storage under a bailment agreement, regardless of who produced the	29
commodities, if a receipt is to be issued for the commodities;	30

(3) All agricultural commodities that are being stored by	31
licensed handlers who own them solely, jointly, or in common with	32
others and who are issuing a receipt for them in accordance with	33
section 926.25 of the Revised Code. The maximum number of bushels	34
on which a licensed handler shall be required to pay the fee under	35
division (B)(3) of this section between the first day of July and	36
the thirtieth day of June of any marketing year shall be the	37
greatest number of bushels of all commodities for which receipts	38
are outstanding at any one time during that period.	39

(4) All agricultural commodities that are not involved in a	40
transaction described in division (B)(1), (2), or (3) of this	41
section and the monetary proceeds of which are controlled by a	42
handler who is not involved in the production of the commodities	43
and who serves as an intermediary between the producer and a	44
handler receiving the commodities. In such a situation, the	45
handler responsible for paying the producer shall remit the fee.	46

(C) All licensed handlers shall account for and remit moneys	47
under division (B) of this section to the director in such manner	48
and using such forms as the director shall prescribe by rule.	49

(D) All disbursements from the fund shall be paid by the	50
treasurer of state pursuant to vouchers authorized by the	51
director.	52

(E) All interest earned by the fees collected under this	53
section shall be credited to the fund and, atAt the request of	54
the director of agriculture and to the extent necessary to pay the	55
examination and administrative costs of this chapter as provided	56
in section 926.19 of the Revised Code, may be transferred by, the	57
director of budget and management shall transfer not more than	58
five hundred thousand dollars per fiscal year from the	59
agricultural commodity depositors fund to the commodity handler	60
regulatory program fund created in that section 926.19 of the	61
Revised Code to pay the examination and administrative costs of	62
this chapter.	63

Sec. 926.17.  (A) The director of agriculture shall annually	64
review the debits of and credits to the agricultural commodity	65
depositors fund created in section 926.16 of the Revised Code and	66
shall make any adjustments in the fee required under that section	67
that are necessary to maintain the fund within the limits	68
established under this section. Not later than the first day of	69
March of each year, the director shall determine the proposed	70
amount of the fee based on the expected volume of agricultural	71
commodities on which the fee is to be collected and that are	72
likely to be handled under this chapter. HeThe director shall	73
make any changes in the previous year's fee in accordance with	74
Chapter 119. of the Revised Code. The fee shall become effective	75
on the following first day of June. It shall in no case exceed	76
one-half of one cent per bushel on all agricultural commodities on	77
which the fee is to be paid.	78

(B)(1) If, at the end of any fiscal year, the assets of the	79
fund exceed one-half of the sum of all claims approved during the	80
preceding four years or fourbalance exceeds ten million dollars,	81
whichever is greater, less any encumbered balances or pending or	82
unsettled claims, the fee required under division (B) of section	83
926.16 of the Revised Code shall be waived until the director,	84
with the consent of the commodity advisory commission created in	85
section 926.32 of the Revised Code, reinstates the fee to maintain	86
the liquidity of the fund as provided in division (B)(2) of this	87
section. The	88

(2) If, at any time, the director may establish the limits of	89
the assets to be maintained indetermines that the fund in	90
accordance with this divisionbalance, less any encumbered	91
balances or pending or unsettled claims, is less than eight	92
million dollars, the director may reinstate the fee required under	93
division (B) of section 926.16 of the Revised Code. If the	94
director reinstates the fee, the director shall notify all	95
licensed handlers by certified mail, return receipt requested, to	96
begin collecting the fee not later than ninety days after being	97
notified.	98

Sec. 926.18.  (A) When a depositor has made a demand for	99
settlement of an obligation concerning an agricultural commodity	100
on which a fee was required to be remitted under section 926.16 of	101
the Revised Code and the licensed handler is experiencing failure,	102
as "failure" is defined in section 926.021 of the Revised Code.,	103
and has failed to honor the demand, the depositor, after providing	104
the director of agriculture or the director's authorized	105
representative with evidence of the depositor's demand and the	106
dishonoring of that demand, may file a claim with the director not	107
later than six months after dishonor of the demand for	108
indemnification of the depositor's damages, from the agricultural	109
commodity depositors fund, to be measured as follows:	110

(1) The commodity advisory commission created in section	111
926.32 of the Revised Code shall establish the dollar value of the	112
loss incurred by a depositor holding a receipt or a ticket for	113
agricultural commodities on which a fee was required and that the	114
depositor delivered to the handler under a delayed price	115
agreement, bailment agreement, or feed agreement, or that the	116
depositor delivered to the handler before delivery was due under a	117
contract or other agreement between the depositor and handler. The	118
value shall be based on the fair market price being paid to	119
producers by handlers for the commodities on the date on which the	120
director received notice that the receipt or ticket was dishonored	121
by the handler. All depositors filing claims under this division	122
shall be bound by the value determined by the commission.	123

(2) The dollar value of the loss incurred by a depositor who	124
has sold or delivered for sale, exchange, or solicitation or	125
negotiation for sale agricultural commodities on which a fee was	126
required and who is a creditor of the handler for all or a part of	127
the value of the commodities shall be based on the amount stated	128
on the obligation on the date of the sale.	129

(B) The agricultural commodity depositors fund shall be	130
liable to a depositor for any moneys that are owed to the	131
depositor for commodities deposited with a licensed handler	132
pursuant to a transaction for which the handler must remit a fee	133
under division (B) of section 926.16 of the Revised Code and that	134
are not recovered through other legal and equitable remedies as	135
follows:	136

(1) For(a) The liability of the fund shall equal one hundred	137
per cent of the depositor's loss as determined under division	138
(A)(1) of this section if any of the following applies:	139

(i) The commodities were stored with a licensedthe handler	140
under a bailment agreement for one hundred per cent of the	141
depositor's loss as determined under division (A)(1) of this	142
section;	143

(2) For commodities deposited with a licensed handler under	144
an agreement other than a bailment agreement for.	145

(ii) Payment for the commodities was tendered by the handler	146
and subsequently dishonored, such as payment by a check for which	147
there were insufficient funds or by a check that was written on an	148
account that was frozen by the financial institution.	149

(iii) The commodities were priced at the time of delivery to	150
the handler, the delivery occurred not more than thirty days prior	151
to the director's suspension of the handler's license under	152
division (E), (G), or (H) of section 926.10 of the Revised Code,	153
and the handler failed to pay for the commodities on or before the	154
date on which the suspension occurred.	155

(iv) The commodities were priced at the time of delivery to	156
the handler, the delivery occurred not more than ninety days prior	157
to the director's suspension of the handler's license under	158
division (E), (G), or (H) of section 926.10 of the Revised Code,	159
the commodities were subject to a written agreement for deferred	160
payment by the handler not later than ninety days following the	161
date of delivery, and the handler failed to pay for the	162
commodities on or before the payment date established in the	163
written agreement.	164

(b) If the deposit of commodities that were the subject of	165
the depositor's loss involves circumstances other than those	166
described in division (B)(1)(a) of this section, the liability of	167
the fund shall equal one hundred per cent of the first ten	168
thousand dollars of the depositor's loss and eighty per cent of	169
the remaining dollar value of that loss as determined under	170
divisions (A)(1) and (2) of this section. The	171

(2) The aggregate amount recovered by a depositor under all	172
remedies shall not exceed one hundred per cent of the value of the	173
depositor's loss. If the moneys recovered by a depositor under all	174
remedies exceed one hundred per cent of the value of the	175
depositor's loss, the depositor shall reimburse the fund in the	176
amount that exceeds the value of that loss.	177

(C) The director, with the approval of the commodity advisory	178
commission, shall determine the validity of all claims presented	179
against the fund. A claim filed under this section for losses on	180
agricultural commodities other than commodities stored under a	181
bailment agreement shall not be valid unless the depositor has	182
made a demand for settlement of the obligation within twelve	183
months after the commodities are priced. Any depositor whose claim	184
has been refused by the director and the commission may appeal the	185
refusal either to the court of common pleas of Franklin county or	186
the court of common pleas of the county in which the depositor	187
resides.	188

The director shall provide for payment from the fund to any	189
depositor whose claim has been found to be valid.	190

(D) If at any time the fund does not contain sufficient	191
assets to pay valid claims, the director shall hold those claims	192
for payment until the fund again contains sufficient assets.	193
Claims against the fund shall be paid in the order in which they	194
are presented and found to be valid.	195

(E) If a depositor files an action for legal or equitable	196
remedies in a state or federal court having jurisdiction in those	197
matters that includes a claim against agricultural commodities	198
upon which the depositor may file a claim against the fund at a	199
later date, the depositor also shall file with the director a copy	200
of the action filed with the court.	201

In the event of payment of a loss under this section, the	202
director shall be subrogated to the extent of the amount of any	203
payments to all rights, powers, privileges, and remedies of the	204
depositor against any person regarding the loss.	205

The depositor shall render all necessary assistance to aid	206
the director in securing the rights granted in this section. No	207
action or claim initiated by the depositor and pending at the time	208
of payment from the fund may be compromised or settled without the	209
consent of the director.	210

(F) If, prior to June 20, 1994, a lawsuit, adversary	211
proceeding, or other legal proceeding is brought against a	212
depositor to recover money or payments from funds to which a	213
depositor has a right of indemnification under this section, and	214
the depositor retains legal counsel resulting in a cost or expense	215
to the depositor, upon the rendering of a judgment or other	216
resolution of the lawsuit, adversary proceeding, or other legal	217
proceeding, the director, in the director's discretion and with	218
the approval of the commodity advisory commission, may authorize	219
indemnification from the fund for attorney's fees paid by the	220
depositor. Any claim made by a depositor for the payment of	221
attorney's fees under this division shall be made in the same	222
manner as a claim under division (A) of this section.	223

Attorney's fees payable under this division shall be limited	224
to the actual hourly fee charged or one hundred dollars per hour,	225
whichever is less, and to a total maximum amount of three hundred	226
dollars.	227

Sec. 926.19.  (A) There is hereby created in the state	228
treasury the commodity handler regulatory program fund. The moneys	229
in the fund shall be used to pay the examination and	230
administrative costs of this chapter and shall consist of:	231

(1) All revenues collected by the director of agriculture	232
from distribution of the receipt forms under division (B) of	233
section 926.20 of the Revised Code and such other forms and	234
registration books as the director may require by rule for the	235
administration of this chapter;	236

(2) The application and examination fees collected under	237
division (B) of section 926.05 of the Revised Code;	238

(3) The agricultural commodity tester certificate fees	239
collected under division (B) of section 926.30 of the Revised	240
Code;	241

(4) Interest incomeAny moneys transferred from the	242
agricultural commodity depositors fund under section 926.16 of the	243
Revised Code;	244

(5) All fines, penalties, and costs, except court costs, that	245
are collected under section 926.99 of the Revised Code in	246
consequence of a violation of this chapter;	247

(6) All sums collected by the director of agriculture under a	248
contract described in section 926.36 of the Revised Code.	249

(B) The examination and administrative costs of this chapter	250
shall be computed by the director not later than the thirty-first	251
day of December of each even-numbered year to cover the biennium	252
that begins on the following first day of July. The commodity	253
advisory commission created in section 926.32 of the Revised Code	254
shall approve, and may amend, the examination and administrative	255
costs. The commission's decision shall be binding on the director.	256
The commission also at any time may approve for presentation to	257
the controlling board a request to increase or decrease the	258
appropriation authority for the biennial examination and	259
administrative costs if it determines that an increase or decrease	260
in the cost is necessary to carry out the purpose of this chapter.	261

(C) If at any time the moneys deposited in the fund,	262
including interest incomemoneys transferred from the agricultural	263
commodity depositors fund under section 926.16 of the Revised	264
Code, are not sufficient to pay the examination and administrative	265
costs of this chapter, the director shall request an appropriation	266
from the general revenue fund to pay those costs.	267

Sec. 926.32.  (A) There is hereby created the commodity	268
advisory commission consisting of seven members to be appointed by	269
the director of agriculture. Not later than January 1, 1983, the	270
director shall make appointments to the commission. Of the initial	271
appointments, three shall be for terms ending January 1, 1984, two	272
shall be for terms ending January 1, 1985, and two shall be for	273
terms ending January 1, 1986. Thereafter, terms of office shall be	274
for three years, each term ending on the same day of the same	275
month of the year as did the term that it succeeds. Each member	276
shall hold office from the date of appointment until the end of	277
the term for which the member was appointed. Any member appointed	278
to fill a vacancy occurring prior to the expiration of the term	279
for which the member's predecessor was appointed shall hold office	280
for the remainder of the term. Any member shall continue in office	281
subsequent to the expiration date of the member's term until the	282
member's successor takes office or until a period of sixty days	283
has elapsed, whichever occurs first.	284

(B) The commission shall at all times be composed of three	285
farmers who are engaged primarily in the production of	286
agricultural commodities, one licensed handler who is the manager	287
of a farmers cooperative, one licensed handler who is the owner	288
and operator of a warehouse located in a rural area, one licensed	289
handler representing a warehouse located at a major agricultural	290
commodity transportation center, and one banker who is an officer	291
of a rural bank. The director shall designate annually one member	292
of the commission to serve as its chairperson and, after notice	293
and public hearing, may remove any member only for neglect of duty	294
or malfeasance in office.	295

(C) A vacancy on the commission shall not impair the right of	296
the other members to exercise all of the commission's powers. Two	297
farmer members and two handler members shall constitute a quorum	298
for the conduct of business of the commission.	299

(D) The commission shall meet at least three times annually	300
at times that the commission shall set by rule and may meet at	301
other times that the chairperson or a majority of the commission	302
members considers appropriate;, provided, that no meeting shall be	303
held on the call of the chairperson unless at least seven days'	304
written notice is first given to all members of the commission.	305

(E) Each member shall be reimbursed for the member's actual	306
and necessary expenses incurred in the discharge of duties as a	307
commission member.	308

(F) The commission may adopt, amend, or rescind rules or	309
procedures governing the conduct of its internal affairs.	310

(G) The commission may request from the director, and the	311
director shall provide, meeting space, assistance, services, and	312
data to enable it to carry out its functions.	313

(H) All costs of the commission, including all of the	314
expenses of its members and consultants authorized in this	315
section, shall be paid from the commodity handler regulatory	316
program fund created in section 926.19 of the Revised Code	317
pursuant to itemized vouchers approved by the chairperson of the	318
commission and the director.	319

(I) The director shall designate an official or employee of	320
the department of agriculture to act as the executive secretary of	321
the commission. The director also may request the attendance at	322
meetings of the commission consultants with expertise in	323
agricultural law, marketing, statistics, or any other subject to	324
advise and consult with the commission on matters on the agenda of	325
any regular or special meeting of the commission. The expenses	326
incurred by consultants attending those meetings shall be	327
reimbursed according to division (H) of this section. The	328
executive secretary shall keep or cause to be kept a permanent	329
journal of all meetings, proceedings, findings, determinations,	330
and recommendations of the commission, including an itemized	331
statement of the expenses allowed to each member of the commission	332
and consultants under this section. The journal shall be a public	333
record.	334

(J) In addition to the authority granted in division (F) of	335
section 926.05, division (B) of section 926.17, divisions (A) and	336
(C) of section 926.18, and division (B) of section 926.19 of the	337
Revised Code, the commission shall advise and counsel the director	338
on all matters relating to:	339

(1) The administration of this chapter;

340

(2) The development of rules authorized by section 926.02 of	341
the Revised Code;	342

(3) Any other matters that the commission and the director	343
consider appropriate in carrying out this chapter.	344

Section 2. That existing sections 926.16, 926.17, 926.18,	345
926.19, and 926.32 of the Revised Code are hereby repealed.	346