Sub. S. B. No. 309 As Passed by the House

As Passed by the House

129th General Assembly

Regular Session

2011-2012

Sub. S. B. No. 309

Senator Hite

Cosponsors: Senators Balderson, Widener, Cafaro, Seitz, Bacon, Beagle, Burke, Coley, Eklund, Faber, Gentile, Hughes, Jones, Kearney, LaRose, Lehner, Manning, Obhof, Oelslager, Patton, Peterson, Sawyer, Schaffer, Schiavoni, Skindell, Smith, Tavares, Turner
Representatives Hall, Boose, Buchy, Clyde, Ruhl, Adams, R., Barnes, Blair, Boyce, Bubp, Carney, Celebrezze, Combs, Damschroder, Derickson, Dovilla, Fedor, Gardner, Garland, Grossman, Hackett, Hagan, C., Hill, Hottinger, Johnson, Kozlowski, Letson, Lundy, Mallory, McClain, McGregor, Milkovich, Newbold, O'Brien, Phillips, Pillich, Scherer, Smith, Sprague, Wachtmann, Winburn, Young

A BILL

To amend sections 905.40 and 924.01 and to enact

sections 924.40 to 924.45 of the Revised Code to

establish procedures and requirements for the

establishment of marketing agreements for

agricultural commodities and to revise the

rule-making authority of the Director of

Agriculture regarding fertilizers, specifically

anhydrous ammonia.

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

Section 1. That sections 905.40 and 924.01 be amended and	9
sections 924.40, 924.41, 924.42, 924.43, 924.44, and 924.45 of the	10
Revised Code be enacted to read as follows:	11

Sec. 905.40. The director of agriculture shall adopt and	12
enforce uniform rules:	13

(A) Governing the storing and handling of ~~fertilizers~~	14
anhydrous ammonia;	15

(B) For safety in the design, construction, location,	16
installation, or operation of ~~equipment for storing, handling,~~	17
~~transporting, and utilizing~~ anhydrous ammonia~~, aqueous ammonia, or~~	18
~~other solutions~~systems for agricultural use ~~as agricultural~~	19
~~fertilizers~~. In addition, with regard to an anhydrous ammonia	20
system that is used for agricultural purposes, the rules shall	21
establish standards and procedures for the approval or disapproval	22
of the design and construction of ~~storage facilities for~~	23
anhydrous ammonia systems and procedures for applying for such	24
approval, including the form of the application.	25

(C) To prohibit the reselling or reuse of such containers	26
without authorization by the owner thereof;	27

(D) Requiring that guaranteed analysis be stated in a form	28
other than that defined in section 905.31 of the Revised Code when	29
another form will not impose an economic hardship on	30
manufacturers, distributors, and users of fertilizer by reason of	31
conflicting labeling requirements among the states.	32

Sec. 924.01. As used in sections 924.01 to 924.16 and	33
~~924.51~~924.40 to 924.55 of the Revised Code:	34

(A) "Agricultural commodity" means any food, fiber, feed,	35
animal, or plant, or group of foods, fibers, feeds, animals, or	36
plants that the director of agriculture determines to be of the	37
same nature, in either a natural or a processed state.	38
"Agricultural commodity" does not include grain as defined in	39
section 924.20 of the Revised Code.	40

(B) "Distributor" means any person who sells, offers for	41
sale, markets, or distributes an agricultural commodity that the	42
person has purchased or acquired directly from a producer, or that	43
the person markets on behalf of a producer.	44

(C) "Handler" means any person who is in the business of	45
packing, grading, selling, offering for sale, or marketing any	46
agricultural commodity in commercial quantities as defined in a	47
marketing program.	48

(D) "Marketing program" means a program that is established	49
by order of the director pursuant to this chapter, to improve or	50
expand the market for an agricultural commodity.	51

(E) "Operating committee" means a committee established to	52
administer a marketing program for an agricultural commodity.	53

(F) "Person" means any natural person, partnership,	54
corporation, society, association, or fiduciary.	55

(G) "Processor" means any person who is in the business of	56
grading, packaging, packing, canning, freezing, dehydrating,	57
fermenting, distilling, extracting, preserving, grinding,	58
crushing, juicing, or in any other way preserving or changing the	59
form of any agricultural commodity.	60

(H) "Producer" means any person who is in the business of	61
producing, or causing to be produced, any agricultural commodity	62
for commercial sale, except that when used in reference to nursery	63
stock, "producer" also means a distributor, processor, handler, or	64
retailer of nursery stock.	65

Sec. 924.40. (A) For purposes of sections 924.40 to 924.46	66
of the Revised Code, the director of agriculture shall adopt rules	67
in accordance with Chapter 119. of the Revised Code that establish	68
procedures and requirements that are necessary to administer and	69
implement a marketing agreement executed under those sections for	70
an agricultural commodity or a region of the state concerning an	71
agricultural commodity that is the subject of the marketing	72
agreement.	73

(B) For purposes of sections 924.40 to 924.45 of the Revised	74
Code, the director may do all of the following:	75

(1) Approve a marketing agreement;

(2) Terminate a marketing agreement executed under those	77
sections if any of the following applies:	78

(a) The director finds that the agreement or any terms of the	79
agreement violate state or federal law.	80

(b) A producer is engaging in malfeasance, disparagement, or	81
unfair trade practices.	82

(c) The number of producers that signed the marketing	83
agreement becomes fewer than the minimum number of producers that	84
are necessary for the administration of the marketing agreement to	85
be financially self-supporting.	86

(3) Enter and inspect a facility of a producer that signed a	87
marketing agreement to ensure compliance with the marketing	88
agreement. The director may delegate that authority to another	89
person or contract with another person to exercise that authority.	90

(4) Adopt rules in accordance with Chapter 119. of the	91
Revised Code that establish civil penalties that the director may	92
assess against a person that signed a marketing agreement who	93
violates its terms or who violates sections 924.40 to 924.45 of	94
the Revised Code and rules adopted under those sections;	95

(5) Enforce rules under sections 924.40 to 924.45 of the	96
Revised Code.	97

Sec. 924.41. A marketing agreement that is executed in	98
compliance with and pursuant to sections 924.40 to 924.45 of the	99
Revised Code for the purpose of the voluntary participation of	100
persons who are signatories to the agreement may provide for the	101
establishment and regulation of one or more of the following:	102

(A) Standards of production for an agricultural commodity,	103
including growing and handling practices, provided that the	104
standards are equivalent to or more stringent than standards of	105
production for that agricultural commodity that are established in	106
the laws of this state or federal law;	107

(B) Standards for the establishment and use of a logo,	108
trademark, or brand associated with an agricultural commodity,	109
provided that the standards do not violate the laws of this state	110
or federal law;	111

(C) Collection of fees for services provided pursuant to the	112
marketing agreement;	113

(D) Any other topic that the director of agriculture may	114
allow by rule.	115

Sec. 924.42. (A) Producers of an agricultural commodity in	116
this state may present to the director of agriculture a petition	117
signed by at least two hundred or twenty-five per cent of all the	118
producers of that agricultural commodity in this state, whichever	119
is less, requesting the director to approve a marketing agreement	120
for that agricultural commodity.	121

(B) A petition submitted under division (A) of this section	122
shall include all of the following:	123

(1) A document that creates and identifies a provisional	124
board of directors for the purpose of facilitating the execution	125
of the proposed marketing agreement, which shall consist of at	126
least three, but not more than five producers of the agricultural	127
commodity that is the subject of the proposed marketing agreement;	128

(2) A proposed marketing agreement that at a minimum contains	129
a description of all of the following:	130

(a) The affected agricultural commodity or the region of the	131
state concerning the agricultural commodity that is the subject of	132
the proposed marketing agreement;	133

(b) Any standards that will be adopted under the proposed	134
marketing agreement;	135

(c) Procedures by which the proposed marketing agreement may	136
be amended;	137

(d) The length of time that the proposed marketing agreement	138
will be in effect;	139

(e) The size and composition of a board of directors that	140
will be established under the marketing agreement for the purpose	141
of administering the agreement;	142

(f) The method by which the members of the board of directors	143
that will be established under the marketing agreement will be	144
elected;	145

(g) The estimated costs to and rate of assessment to be made	146
on each person who is a signatory to the marketing agreement for	147
purposes of membership, inspections, or other services provided by	148
the board of directors under the marketing agreement in	149
conjunction with the person's participation in the marketing	150
agreement;	151

(h) The minimum number of producers that are necessary for	152
the marketing agreement to be financially self-supporting;	153

(i) Any other information that the director may require by	154
rule.	155

(3) An unbiased and accurate summary of the proposed	156
marketing agreement.	157

(C) The petitioners shall include with the petition submitted	158
under division (A) of this section all of the following:	159

(1) A current list of producers of the agricultural commodity	160
or in the region of the state concerning the agricultural	161
commodity that is the subject of the proposed marketing agreement.	162
The list may be created from existing records or records that are	163
available from any reliable source.	164

(2) An administration fee of five hundred dollars or another	165
amount that the director determines is necessary to pay the costs	166
of the director of notifying all known producers of the affected	167
agricultural commodity or in the region of the state concerning	168
the agricultural commodity that is the subject of the proposed	169
marketing agreement and the costs of conducting the public meeting	170
that is required in section 924.43 of the Revised Code concerning	171
the proposed marketing agreement;	172

(3) Information that demonstrates that the producers of the	173
agricultural commodity or in the region of the state concerning	174
the agricultural commodity that is the subject of the proposed	175
marketing agreement have sufficient money to pay the costs of a	176
board of directors to administer the marketing agreement and to	177
pay the costs of administration and enforcement of the marketing	178
agreement.	179

Sec. 924.43. (A) After receipt of a petition submitted under	180
division (A) of section 924.42 of the Revised Code, the director	181
of agriculture shall notify all producers included in the list	182
provided to the director under division (C)(1) of that section.	183
The notification shall contain a description of the purpose of the	184
proposed marketing agreement and provide the date, time, and	185
location of a public meeting that will be conducted by the	186
director as required by division (B) of this section. The	187
notification shall be sent through regular mail and published in	188
at least one publication specific to the agricultural commodity	189
that is the subject of the proposed marketing agreement. In	190
addition, the director may post the notification on the department	191
of agriculture's web site.	192

(B) Not later than thirty days after receipt of a petition	193
submitted under division (A) of section 924.42 of the Revised	194
Code, the director shall conduct a public meeting concerning the	195
proposed marketing agreement for an agricultural commodity or for	196
the region of the state concerning an agricultural commodity. At	197
the meeting, the director shall allow any interested person to	198
present information concerning the proposed marketing agreement.	199

(C) At least a majority of the members of the provisional	200
board of directors created pursuant to division (B)(1) of section	201
924.42 of the Revised Code shall attend the public meeting	202
conducted by the director pursuant to division (B) of this	203
section. The provisional board shall consider all of the	204
information presented at the public meeting before drafting a	205
marketing agreement that will be submitted to the director for	206
approval. Not later than thirty days after the public meeting, the	207
provisional board shall submit to the director for approval a	208
marketing agreement that complies with section 924.44 of the	209
Revised Code for an agricultural commodity or for a region of the	210
state concerning an agricultural commodity.	211

(D)(1) Not later than thirty days after receipt of a	212
marketing agreement, the director shall consider all of the	213
information presented at the public meeting conducted under	214
division (B) of this section before approving or denying the	215
marketing agreement. The director may approve a marketing	216
agreement only if all of the following apply:	217

(a) The director is unable to discover a substantially	218
similar marketing agreement existing for the agricultural	219
commodity or for the region of the state concerning the	220
agricultural commodity that is the subject of the marketing	221
agreement.	222

(b) The marketing agreement complies with section 924.44 of	223
the Revised Code.	224

(c) The marketing agreement complies with the laws of this	225
state and federal law.	226

(d) The director determines that the producers of the	227
agricultural commodity or the region of the state concerning the	228
agricultural commodity that is the subject of the marketing	229
agreement have sufficient money to pay the costs of a board of	230
directors to administer the marketing agreement and to pay the	231
costs of administration and enforcement of the marketing agreement	232
pursuant to the information submitted under division (C)(3) of	233
section 924.42 of the Revised Code.	234

(2) The director shall send notice to the provisional board	235
of directors created pursuant to division (B)(1) of section 924.42	236
of the Revised Code of the director's decision to approve or deny	237
the marketing agreement. If the director approves the marketing	238
agreement, the notice shall indicate the date by which producers	239
will be required to sign the marketing agreement, which shall be	240
sixty days after the date on which the director approved the	241
marketing agreement.	242

(3) If the provisional board of directors created pursuant to	243
division (B)(1) of section 924.42 of the Revised Code receives	244
notice from the director approving the marketing agreement, the	245
board shall notify all known producers of the agricultural	246
commodity or all known producers in the region in which the	247
agricultural commodity is produced that is the subject of the	248
approved marketing agreement. The notice shall include the date by	249
which producers must sign the marketing agreement.	250

(4) Following the date by which producers desiring to be	251
signatories to the marketing agreement are required to sign the	252
agreement, the director shall determine if there is a sufficient	253
number of producers that signed the marketing agreement for the	254
administration of the marketing agreement to be financially	255
self-supporting plus an additional twenty per cent of that number.	256
If the director determines that at least the minimum number of	257
required producers have signed the marketing agreement, the	258
director shall sign the marketing agreement and the marketing	259
agreement shall be effective on the date on which the director	260
signs it.	261

Sec. 924.44. A marketing agreement submitted by a	262
provisional board of directors under section 924.43 of the Revised	263
Code at a minimum shall contain terms that establish all of the	264
following:	265

(A) The identification of the agricultural commodity or of	266
the region of the state concerning the agricultural commodity that	267
is the subject of the marketing agreement;	268

(B) Standards, if any, of production for the agricultural	269
commodity or of marketing that will apply to each producer that	270
signs the marketing agreement;	271

(C) Standards for the use of a logo, trademark, or brand	272
associated with the agricultural commodity;	273

(D) The length of time that the marketing agreement will be	274
in effect, whether the marketing agreement may be renewed, and, if	275
so, procedures for renewal;	276

(E) Procedures by which the marketing agreement may be	277
amended. The procedures shall require the approval of the director	278
of agriculture and of at least a majority of the producers that	279
are signatories to the marketing agreement in order for an	280
amendment to be effective.	281

(F) The size and composition of a board of directors that	282
will administer the marketing agreement;	283

(G) Procedures for the election of members of the board of	284
directors;	285

(H) The lengths of terms of members of the board of directors	286
and conditions, if any, for reelection;	287

(I) Procedures for the removal of a member of the board of	288
directors for misfeasance, malfeasance, or nonfeasance;	289

(J) The costs to and rate of assessment to be made on each	290
person who is a signatory to the marketing agreement for purposes	291
of membership, inspections, or other services provided by the	292
board of directors under the marketing agreement in conjunction	293
with the person's participation in the marketing agreement;	294

(K) Procedures by which producers of the agricultural	295
commodity may become signatories to the marketing agreement after	296
the agreement takes effect;	297

(L) Procedures by which producers who are signatories to the	298
marketing agreement may be removed from the marketing agreement;	299

(M) Procedures by which producers that are signatories to the	300
marketing agreement may terminate the marketing agreement;	301

(N) Any other procedures or requirements that the director of	302
agriculture requires by rule.	303

Sec. 924.45. (A)(1) After a marketing agreement takes	304
effect, a board of directors that will administer the marketing	305
agreement shall be established in accordance with the terms of the	306
marketing agreement. Except for the director of agriculture or the	307
director's designee who shall serve as an ex officio member of the	308
board of directors, members of the board shall be selected only	309
from individuals who are producers that signed the marketing	310
agreement.	311

(2) The provisional board of directors created pursuant to	312
division (B)(1) of section 924.42 of the Revised Code shall verify	313
that the board of directors is established in accordance with the	314
terms of the marketing agreement. If the provisional board of	315
directors determines that the board of directors was not	316
established in accordance with the terms of the marketing	317
agreement, the provisional board shall notify the director who	318
shall take appropriate actions to ensure that the board of	319
directors is established in accordance with the terms of the	320
marketing agreement. If the provisional board of directors	321
determines that the board of directors was established in	322
accordance with the terms of the marketing agreement, the	323
provisional board shall cease to exist.	324

(B) A board of directors that is established to administer a	325
marketing agreement shall do all of the following:	326

(1) Establish priorities of the board that are consistent	327
with the estimated financial resources that will be generated	328
under the terms of the marketing agreement and with the scope of	329
the marketing agreement;	330

(2) Prepare a budget that is consistent with the estimated	331
financial resources that will be generated under the terms of the	332
marketing agreement and with the scope of the marketing agreement;	333

(3) Deposit all money collected pursuant to the marketing	334
agreement with a bank as defined in section 1101.01 of the Revised	335
Code or with a savings and loan association as defined in section	336
1151.01 of the Revised Code. The board shall use the money only to	337
pay the costs of the board in administering the marketing	338
agreement and of the activities authorized under the marketing	339
agreement and under sections 924.40 to 924.45 of the Revised Code.	340

(4) Establish a fiscal year for purposes of marketing	341
activities performed under the terms of the marketing agreement;	342

(5) Publish an activity and financial report not later than	343
sixty days after the end of a fiscal year. The board shall make	344
the report available to each producer that signed the marketing	345
agreement and to other interested parties.	346

(6) Provide annually to the director of agriculture and to	347
each producer that signed the marketing agreement a financial	348
statement that is prepared by a person who holds a current	349
certificate as a certified public accountant issued under Chapter	350
4701. of the Revised Code. The board shall provide the financial	351
statement to the director not later than sixty days after the end	352
of a fiscal year.	353

(7) Reimburse the department of agriculture for actual	354
administrative costs incurred by the department in the	355
administration of sections 924.40 to 924.45 of the Revised Code.	356
However, the amount reimbursed in a fiscal year shall not exceed	357
ten per cent of the total amount of money collected in that fiscal	358
year by the board of directors under the authority of the	359
marketing agreement.	360

(8) Perform all other acts and exercise all other powers that	361
are reasonably necessary, proper, or advisable to effectuate the	362
purposes of sections 924.40 to 924.45 of the Revised Code.	363

(C) A board of directors that is established to administer a	364
marketing agreement may do all of the following:	365

(1) Propose to the director rules that are necessary for the	366
board to perform its duties under the requirements of the	367
marketing agreement and under sections 924.40 to 924.45 of the	368
Revised Code;	369

(2) Hire personnel and contract for services that are	370
necessary for the implementation and administration of the	371
marketing agreement;	372

(3) Receive and investigate, or cause to be investigated, a	373
complaint concerning an alleged violation of a term of the	374
marketing agreement. If the board determines that such a violation	375
has occurred, the board shall refer the matter to the director for	376
enforcement.	377

(4) Amend the marketing agreement in accordance with the	378
terms of the marketing agreement and with sections 924.40 to	379
924.45 of the Revised Code;	380

(5) Terminate the marketing agreement with the approval of a	381
majority of the participating producers that are signatories to	382
the marketing agreement. If the marketing agreement is terminated,	383
the board shall distribute any remaining unobligated money	384
collected under the authority of the marketing agreement to each	385
participating producer in the same proportion that the producer	386
paid assessments under the marketing agreement.	387

Section 2. That existing sections 905.40 and 924.01 of the	388
Revised Code are hereby repealed.	389