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 1
to 924.45 of the Revised Code to establish 2
procedures and requirements for the establishment 3
of marketing agreements for agricultural 4
commodities.5


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
924.51924.40 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;52

       (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