S. B. No. 309 As Passed by the Senate

As Passed by the Senate

129th General Assembly

Regular Session

2011-2012

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

A BILL

To amend section 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.

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

Section 1. That section 924.01 be amended and sections	6
924.40, 924.41, 924.42, 924.43, 924.44, and 924.45 of the Revised	7
Code be enacted to read as follows:	8

Sec. 924.01. As used in sections 924.01 to 924.16 and	9
~~924.51~~924.40 to 924.55 of the Revised Code:	10

(A) "Agricultural commodity" means any food, fiber, feed,	11
animal, or plant, or group of foods, fibers, feeds, animals, or	12
plants that the director of agriculture determines to be of the	13
same nature, in either a natural or a processed state.	14
"Agricultural commodity" does not include grain as defined in	15
section 924.20 of the Revised Code.	16

(B) "Distributor" means any person who sells, offers for	17
sale, markets, or distributes an agricultural commodity that the	18
person has purchased or acquired directly from a producer, or that	19
the person markets on behalf of a producer.	20

(C) "Handler" means any person who is in the business of	21
packing, grading, selling, offering for sale, or marketing any	22
agricultural commodity in commercial quantities as defined in a	23
marketing program.	24

(D) "Marketing program" means a program that is established	25
by order of the director pursuant to this chapter, to improve or	26
expand the market for an agricultural commodity.	27

(E) "Operating committee" means a committee established to	28
administer a marketing program for an agricultural commodity.	29

(F) "Person" means any natural person, partnership,	30
corporation, society, association, or fiduciary.	31

(G) "Processor" means any person who is in the business of	32
grading, packaging, packing, canning, freezing, dehydrating,	33
fermenting, distilling, extracting, preserving, grinding,	34
crushing, juicing, or in any other way preserving or changing the	35
form of any agricultural commodity.	36

(H) "Producer" means any person who is in the business of	37
producing, or causing to be produced, any agricultural commodity	38
for commercial sale, except that when used in reference to nursery	39
stock, "producer" also means a distributor, processor, handler, or	40
retailer of nursery stock.	41

Sec. 924.40. (A) For purposes of sections 924.40 to 924.46	42
of the Revised Code, the director of agriculture shall adopt rules	43
in accordance with Chapter 119. of the Revised Code that establish	44
procedures and requirements that are necessary to administer and	45
implement a marketing agreement executed under those sections for	46
an agricultural commodity or a region of the state concerning an	47
agricultural commodity that is the subject of the marketing	48
agreement.	49

(B) For purposes of sections 924.40 to 924.45 of the Revised	50
Code, the director may do all of the following:	51

(1) Approve a marketing agreement;

(2) Terminate a marketing agreement executed under those	53
sections if any of the following applies:	54

(a) The director finds that the agreement or any terms of the	55
agreement violate state or federal law.	56

(b) A producer is engaging in malfeasance, disparagement, or	57
unfair trade practices.	58

(c) The number of producers that signed the marketing	59
agreement becomes fewer than the minimum number of producers that	60
are necessary for the administration of the marketing agreement to	61
be financially self-supporting.	62

(3) Enter and inspect a facility of a producer that signed a	63
marketing agreement to ensure compliance with the marketing	64
agreement. The director may delegate that authority to another	65
person or contract with another person to exercise that authority.	66

(4) Adopt rules in accordance with Chapter 119. of the	67
Revised Code that establish civil penalties that the director may	68
assess against a person that signed a marketing agreement who	69
violates its terms or who violates sections 924.40 to 924.45 of	70
the Revised Code and rules adopted under those sections;	71

(5) Enforce rules under sections 924.40 to 924.45 of the	72
Revised Code.	73

Sec. 924.41. A marketing agreement that is executed in	74
compliance with and pursuant to sections 924.40 to 924.45 of the	75
Revised Code for the purpose of the voluntary participation of	76
persons who are signatories to the agreement may provide for the	77
establishment and regulation of one or more of the following:	78

(A) Standards of production for an agricultural commodity,	79
including growing and handling practices, provided that the	80
standards are equivalent to or more stringent than standards of	81
production for that agricultural commodity that are established in	82
the laws of this state or federal law;	83

(B) Standards for the establishment and use of a logo,	84
trademark, or brand associated with an agricultural commodity,	85
provided that the standards do not violate the laws of this state	86
or federal law;	87

(C) Collection of fees for services provided pursuant to the	88
marketing agreement;	89

(D) Any other topic that the director of agriculture may	90
allow by rule.	91

Sec. 924.42. (A) Producers of an agricultural commodity in	92
this state may present to the director of agriculture a petition	93
signed by at least two hundred or twenty-five per cent of all the	94
producers of that agricultural commodity in this state, whichever	95
is less, requesting the director to approve a marketing agreement	96
for that agricultural commodity.	97

(B) A petition submitted under division (A) of this section	98
shall include all of the following:	99

(1) A document that creates and identifies a provisional	100
board of directors for the purpose of facilitating the execution	101
of the proposed marketing agreement, which shall consist of at	102
least three, but not more than five producers of the agricultural	103
commodity that is the subject of the proposed marketing agreement;	104

(2) A proposed marketing agreement that at a minimum contains	105
a description of all of the following:	106

(a) The affected agricultural commodity or the region of the	107
state concerning the agricultural commodity that is the subject of	108
the proposed marketing agreement;	109

(b) Any standards that will be adopted under the proposed	110
marketing agreement;	111

(c) Procedures by which the proposed marketing agreement may	112
be amended;	113

(d) The length of time that the proposed marketing agreement	114
will be in effect;	115

(e) The size and composition of a board of directors that	116
will be established under the marketing agreement for the purpose	117
of administering the agreement;	118

(f) The method by which the members of the board of directors	119
that will be established under the marketing agreement will be	120
elected;	121

(g) The estimated costs to and rate of assessment to be made	122
on each person who is a signatory to the marketing agreement for	123
purposes of membership, inspections, or other services provided by	124
the board of directors under the marketing agreement in	125
conjunction with the person's participation in the marketing	126
agreement;	127

(h) The minimum number of producers that are necessary for	128
the marketing agreement to be financially self-supporting;	129

(i) Any other information that the director may require by	130
rule.	131

(3) An unbiased and accurate summary of the proposed	132
marketing agreement.	133

(C) The petitioners shall include with the petition submitted	134
under division (A) of this section all of the following:	135

(1) A current list of producers of the agricultural commodity	136
or in the region of the state concerning the agricultural	137
commodity that is the subject of the proposed marketing agreement.	138
The list may be created from existing records or records that are	139
available from any reliable source.	140

(2) An administration fee of five hundred dollars or another	141
amount that the director determines is necessary to pay the costs	142
of the director of notifying all known producers of the affected	143
agricultural commodity or in the region of the state concerning	144
the agricultural commodity that is the subject of the proposed	145
marketing agreement and the costs of conducting the public meeting	146
that is required in section 924.43 of the Revised Code concerning	147
the proposed marketing agreement;	148

(3) Information that demonstrates that the producers of the	149
agricultural commodity or in the region of the state concerning	150
the agricultural commodity that is the subject of the proposed	151
marketing agreement have sufficient money to pay the costs of a	152
board of directors to administer the marketing agreement and to	153
pay the costs of administration and enforcement of the marketing	154
agreement.	155

Sec. 924.43. (A) After receipt of a petition submitted under	156
division (A) of section 924.42 of the Revised Code, the director	157
of agriculture shall notify all producers included in the list	158
provided to the director under division (C)(1) of that section.	159
The notification shall contain a description of the purpose of the	160
proposed marketing agreement and provide the date, time, and	161
location of a public meeting that will be conducted by the	162
director as required by division (B) of this section. The	163
notification shall be sent through regular mail and published in	164
at least one publication specific to the agricultural commodity	165
that is the subject of the proposed marketing agreement. In	166
addition, the director may post the notification on the department	167
of agriculture's web site.	168

(B) Not later than thirty days after receipt of a petition	169
submitted under division (A) of section 924.42 of the Revised	170
Code, the director shall conduct a public meeting concerning the	171
proposed marketing agreement for an agricultural commodity or for	172
the region of the state concerning an agricultural commodity. At	173
the meeting, the director shall allow any interested person to	174
present information concerning the proposed marketing agreement.	175

(C) At least a majority of the members of the provisional	176
board of directors created pursuant to division (B)(1) of section	177
924.42 of the Revised Code shall attend the public meeting	178
conducted by the director pursuant to division (B) of this	179
section. The provisional board shall consider all of the	180
information presented at the public meeting before drafting a	181
marketing agreement that will be submitted to the director for	182
approval. Not later than thirty days after the public meeting, the	183
provisional board shall submit to the director for approval a	184
marketing agreement that complies with section 924.44 of the	185
Revised Code for an agricultural commodity or for a region of the	186
state concerning an agricultural commodity.	187

(D)(1) Not later than thirty days after receipt of a	188
marketing agreement, the director shall consider all of the	189
information presented at the public meeting conducted under	190
division (B) of this section before approving or denying the	191
marketing agreement. The director may approve a marketing	192
agreement only if all of the following apply:	193

(a) The director is unable to discover a substantially	194
similar marketing agreement existing for the agricultural	195
commodity or for the region of the state concerning the	196
agricultural commodity that is the subject of the marketing	197
agreement.	198

(b) The marketing agreement complies with section 924.44 of	199
the Revised Code.	200

(c) The marketing agreement complies with the laws of this	201
state and federal law.	202

(d) The director determines that the producers of the	203
agricultural commodity or the region of the state concerning the	204
agricultural commodity that is the subject of the marketing	205
agreement have sufficient money to pay the costs of a board of	206
directors to administer the marketing agreement and to pay the	207
costs of administration and enforcement of the marketing agreement	208
pursuant to the information submitted under division (C)(3) of	209
section 924.42 of the Revised Code.	210

(2) The director shall send notice to the provisional board	211
of directors created pursuant to division (B)(1) of section 924.42	212
of the Revised Code of the director's decision to approve or deny	213
the marketing agreement. If the director approves the marketing	214
agreement, the notice shall indicate the date by which producers	215
will be required to sign the marketing agreement, which shall be	216
sixty days after the date on which the director approved the	217
marketing agreement.	218

(3) If the provisional board of directors created pursuant to	219
division (B)(1) of section 924.42 of the Revised Code receives	220
notice from the director approving the marketing agreement, the	221
board shall notify all known producers of the agricultural	222
commodity or all known producers in the region in which the	223
agricultural commodity is produced that is the subject of the	224
approved marketing agreement. The notice shall include the date by	225
which producers must sign the marketing agreement.	226

(4) Following the date by which producers desiring to be	227
signatories to the marketing agreement are required to sign the	228
agreement, the director shall determine if there is a sufficient	229
number of producers that signed the marketing agreement for the	230
administration of the marketing agreement to be financially	231
self-supporting plus an additional twenty per cent of that number.	232
If the director determines that at least the minimum number of	233
required producers have signed the marketing agreement, the	234
director shall sign the marketing agreement and the marketing	235
agreement shall be effective on the date on which the director	236
signs it.	237

Sec. 924.44. A marketing agreement submitted by a	238
provisional board of directors under section 924.43 of the Revised	239
Code at a minimum shall contain terms that establish all of the	240
following:	241

(A) The identification of the agricultural commodity or of	242
the region of the state concerning the agricultural commodity that	243
is the subject of the marketing agreement;	244

(B) Standards, if any, of production for the agricultural	245
commodity or of marketing that will apply to each producer that	246
signs the marketing agreement;	247

(C) Standards for the use of a logo, trademark, or brand	248
associated with the agricultural commodity;	249

(D) The length of time that the marketing agreement will be	250
in effect, whether the marketing agreement may be renewed, and, if	251
so, procedures for renewal;	252

(E) Procedures by which the marketing agreement may be	253
amended. The procedures shall require the approval of the director	254
of agriculture and of at least a majority of the producers that	255
are signatories to the marketing agreement in order for an	256
amendment to be effective.	257

(F) The size and composition of a board of directors that	258
will administer the marketing agreement;	259

(G) Procedures for the election of members of the board of	260
directors;	261

(H) The lengths of terms of members of the board of directors	262
and conditions, if any, for reelection;	263

(I) Procedures for the removal of a member of the board of	264
directors for misfeasance, malfeasance, or nonfeasance;	265

(J) The costs to and rate of assessment to be made on each	266
person who is a signatory to the marketing agreement for purposes	267
of membership, inspections, or other services provided by the	268
board of directors under the marketing agreement in conjunction	269
with the person's participation in the marketing agreement;	270

(K) Procedures by which producers of the agricultural	271
commodity may become signatories to the marketing agreement after	272
the agreement takes effect;	273

(L) Procedures by which producers who are signatories to the	274
marketing agreement may be removed from the marketing agreement;	275

(M) Procedures by which producers that are signatories to the	276
marketing agreement may terminate the marketing agreement;	277

(N) Any other procedures or requirements that the director of	278
agriculture requires by rule.	279

Sec. 924.45. (A)(1) After a marketing agreement takes	280
effect, a board of directors that will administer the marketing	281
agreement shall be established in accordance with the terms of the	282
marketing agreement. Except for the director of agriculture or the	283
director's designee who shall serve as an ex officio member of the	284
board of directors, members of the board shall be selected only	285
from individuals who are producers that signed the marketing	286
agreement.	287

(2) The provisional board of directors created pursuant to	288
division (B)(1) of section 924.42 of the Revised Code shall verify	289
that the board of directors is established in accordance with the	290
terms of the marketing agreement. If the provisional board of	291
directors determines that the board of directors was not	292
established in accordance with the terms of the marketing	293
agreement, the provisional board shall notify the director who	294
shall take appropriate actions to ensure that the board of	295
directors is established in accordance with the terms of the	296
marketing agreement. If the provisional board of directors	297
determines that the board of directors was established in	298
accordance with the terms of the marketing agreement, the	299
provisional board shall cease to exist.	300

(B) A board of directors that is established to administer a	301
marketing agreement shall do all of the following:	302

(1) Establish priorities of the board that are consistent	303
with the estimated financial resources that will be generated	304
under the terms of the marketing agreement and with the scope of	305
the marketing agreement;	306

(2) Prepare a budget that is consistent with the estimated	307
financial resources that will be generated under the terms of the	308
marketing agreement and with the scope of the marketing agreement;	309

(3) Deposit all money collected pursuant to the marketing	310
agreement with a bank as defined in section 1101.01 of the Revised	311
Code or with a savings and loan association as defined in section	312
1151.01 of the Revised Code. The board shall use the money only to	313
pay the costs of the board in administering the marketing	314
agreement and of the activities authorized under the marketing	315
agreement and under sections 924.40 to 924.45 of the Revised Code.	316

(4) Establish a fiscal year for purposes of marketing	317
activities performed under the terms of the marketing agreement;	318

(5) Publish an activity and financial report not later than	319
sixty days after the end of a fiscal year. The board shall make	320
the report available to each producer that signed the marketing	321
agreement and to other interested parties.	322

(6) Provide annually to the director of agriculture and to	323
each producer that signed the marketing agreement a financial	324
statement that is prepared by a person who holds a current	325
certificate as a certified public accountant issued under Chapter	326
4701. of the Revised Code. The board shall provide the financial	327
statement to the director not later than sixty days after the end	328
of a fiscal year.	329

(7) Reimburse the department of agriculture for actual	330
administrative costs incurred by the department in the	331
administration of sections 924.40 to 924.45 of the Revised Code.	332
However, the amount reimbursed in a fiscal year shall not exceed	333
ten per cent of the total amount of money collected in that fiscal	334
year by the board of directors under the authority of the	335
marketing agreement.	336

(8) Perform all other acts and exercise all other powers that	337
are reasonably necessary, proper, or advisable to effectuate the	338
purposes of sections 924.40 to 924.45 of the Revised Code.	339

(C) A board of directors that is established to administer a	340
marketing agreement may do all of the following:	341

(1) Propose to the director rules that are necessary for the	342
board to perform its duties under the requirements of the	343
marketing agreement and under sections 924.40 to 924.45 of the	344
Revised Code;	345

(2) Hire personnel and contract for services that are	346
necessary for the implementation and administration of the	347
marketing agreement;	348

(3) Receive and investigate, or cause to be investigated, a	349
complaint concerning an alleged violation of a term of the	350
marketing agreement. If the board determines that such a violation	351
has occurred, the board shall refer the matter to the director for	352
enforcement.	353

(4) Amend the marketing agreement in accordance with the	354
terms of the marketing agreement and with sections 924.40 to	355
924.45 of the Revised Code;	356

(5) Terminate the marketing agreement with the approval of a	357
majority of the participating producers that are signatories to	358
the marketing agreement. If the marketing agreement is terminated,	359
the board shall distribute any remaining unobligated money	360
collected under the authority of the marketing agreement to each	361
participating producer in the same proportion that the producer	362
paid assessments under the marketing agreement.	363

Section 2. That existing section 924.01 of the Revised Code	364
is hereby repealed.	365