AN ACT Relating to agriculture; amending RCW 15.49.470, 15.54.480, 15.52.320, 15.53.9044, 15.30.040, 15.09.030, 69.04.930, 20.01.030, 15.88.030, 15.88.040, 15.88.100, 20.01.080, 20.01.380, 20.01.420, and 20.01.460; adding a new chapter to Title 7 RCW; adding a new section to chapter 43.23 RCW; adding a new section to chapter 69.07 RCW; prescribing penalties; providing an effective date; and declaring an emergency.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION. Sec. 1. A new section is added to chapter 43.23 RCW to read as follows:

The agricultural local fund is hereby established in the custody of the state treasurer. The fund shall consist of such money as is directed by law for deposit in the fund, and such other money not subject to appropriation that the department authorizes to be deposited in the fund. Any money deposited in the fund, the use of which has been restricted by law, may only be expended in accordance with those restrictions. No appropriation is required for disbursements from the fund.

Sec. 2. Section 47, chapter 63, Laws of 1969 as last amended by section 176, chapter 202, Laws of 1987 and RCW 15.49.470 are each amended to read as follows:

All moneys collected under the provisions of this chapter shall be paid ((~~into the seed fund in the state treasury which is hereby established~~)) to the director and deposited in an account within the agricultural local fund. Such ((~~fund~~)) deposits shall be used only in the administration and enforcement of this chapter. ((~~All moneys collected under the provisions of chapter 15.49 RCW and remaining in such seed fund account on July 1, 1975, shall likewise be used only in the enforcement of this chapter: PROVIDED, That~~)) Any residual balance remaining in the seed fund on the effective date of this 1988 section shall be transferred to that account within the agricultural local fund. All fees, fines, forfeitures and penalties collected or assessed by a district court because of the violation of a state law shall be remitted as provided in chapter 3.62 RCW as now exists or is later amended.

Sec. 3. Section 36, chapter 22, Laws of 1967 ex. sess. as amended by section 11, chapter 257, Laws of 1975 1st ex. sess. and RCW 15.54.480 are each amended to read as follows:

All moneys collected under the provisions of this chapter shall be paid ((~~into the fertilizer, agricultural mineral and lime fund in the state treasury which is hereby established~~)) to the director and deposited in an account within the agricultural local fund. Such ((~~fund~~)) deposits shall be used only in the administration and enforcement of this chapter. ((All moneys collected under the provisions of chapter 15.54 RCW and remaining in such fertilizer, agricultural mineral and lime account in the state general fund on July 1, 1975, shall likewise be used only in the enforcement of this chapter.)) Any residual balance remaining in the fertilizer, agricultural mineral and lime fund on the effective date of this 1988 section shall be transferred to that account within the agricultural local fund.

Sec. 4. Section 15.52.320, chapter 11, Laws of 1961 as amended by section 2, chapter 57, Laws of 1985 and RCW 15.52.320 are each amended to read as follows:

All money collected as fees for brand registrations hereunder shall be paid to the director and deposited in ((~~a special~~)) an account ((~~in the state treasury known as the feed and fertilizer account, and~~)) within the agricultural local fund. Such deposits shall be used exclusively for the maintenance and enforcement of this chapter, except that not to exceed fifteen percent of said registration fees may, with the consent of the director, be used to purchase equipment and materials to facilitate testing and analyzing required herein. ((~~All earnings of investments of balances in the feed and fertilizer account shall be credited to the general fund.~~)) Any residual balance remaining in the feed and fertilizer account on the effective date of this 1988 section shall be transferred to the account within the agricultural local fund.

Sec. 5. Section 19, chapter 31, Laws of 1965 ex. sess. as amended by section 8, chapter 257, Laws of 1975 1st ex. sess. and RCW 15.53.9044 are each amended to read as follows:

All moneys collected under ((~~the provisions of~~)) this chapter shall be paid ((~~into the commercial feed fund in the state treasury which is hereby established~~)) to the director and deposited in an account within the agricultural local fund. Such ((~~fund~~)) deposits shall be used only in the administration and enforcement of this chapter. ((All moneys collected under the provisions of chapter 15.53 RCW and remaining in such commercial feed account in the state general fund on the effective date of this chapter, shall be used in enforcement of this chapter.)) Any residual balance remaining in the commercial feed fund on the effective date of this 1988 section shall be transferred to the account within the agricultural local fund.

Sec. 6. Section 4, chapter 29, Laws of 1961 and RCW 15.30.040 are each amended to read as follows:

The application for an annual license to engage in the business of operating a controlled atmosphere storage warehouse or warehouses shall be accompanied by an annual license fee ((~~of five dollars~~)) prescribed by the director by rule.

Sec. 7. Section 3, chapter 113, Laws of 1969 and RCW 15.09.030 are each amended to read as follows:

Each horticultural pest and disease board shall be comprised of five voting members, four of whom shall be appointed by the board of county commissioners and one of whom shall be ((~~the inspector at large for the horticultural district in which the county is located~~)) appointed by the director. In addition, the chief county extension agent, or a county extension agent appointed by the chief agent, shall be a nonvoting member of the board.

Of the four members appointed by the board of county commissioners, one of such members shall have at least a practical knowledge of horticultural pests and diseases, and the other members shall be residents of the county, shall own land within the county and shall be engaged in the primary and commercial production of a horticultural product or products. Such appointed members shall serve a term of two years and shall serve without salary.

Sec. 8. Section 1, chapter 39, Laws of 1975 as amended by section 179, chapter 46, Laws of 1983 1st ex. sess. and RCW 69.04.930 are each amended to read as follows:

It shall be unlawful for any person to sell at retail or display for sale at retail any food fish or shellfish as defined in RCW 75.08.011, any meat capable of use as human food as defined in RCW 16.49A.150 as now or hereafter amended, or any meat food product as defined in RCW 16.49A.130 as now or hereafter amended which has been frozen ((~~subsequent to being offered for sale or distribution to the ultimate consumer~~)) at any time, without having the package or container in which the same is sold bear a label clearly discernible to a customer that such product has been frozen and whether or not the same has since been thawed. No such food fish or shellfish, meat or meat food product shall be sold unless in such a package or container bearing said label: PROVIDED, That this section shall not include any of the aforementioned food or food products that have been frozen prior to being smoked, cured, cooked or subjected to the heat of commercial sterilization.

NEW SECTION. Sec. 9. A new section is added to chapter 69.07 RCW to read as follows:

The department may issue sanitary certificates to food processors under this chapter subject to such requirements as it may establish by rule. The fee for issuance shall be twenty dollars per certificate. Fees collected under this section shall be deposited in the agricultural local fund.

Sec. 10. Section 3, chapter 139, Laws of 1959 as last amended by section 2, chapter 305, Laws of 1983 and RCW 20.01.030 are each amended to read as follows:

This chapter does not apply to:

(1) Any cooperative marketing associations or federations incorporated under, or whose articles of incorporation and bylaws are equivalent to, the requirements of chapter 23.86 RCW or chapter 24.32 RCW, except as to that portion of the activities of the association or federation that involve the handling or dealing in the agricultural products of nonmembers of the organization: PROVIDED, That the associations or federations may purchase up to fifteen percent of their gross from nonmembers for the purpose of filling orders: PROVIDED FURTHER, That if the cooperative or association acts as a processor as defined in RCW 20.01.500(2) and markets the processed agricultural crops on behalf of the grower or its own behalf, the association or federation is subject to the provisions of RCW 20.01.500 through 20.01.560 and the license provision of this chapter excluding bonding provisions: PROVIDED FURTHER, That none of the foregoing exemptions in this subsection apply to any such cooperative or federation dealing in or handling grain in any manner, and not licensed under the provisions of chapter 22.09 RCW;

(2) Any person who sells exclusively his or her own agricultural products as the producer thereof;

(3) Any public livestock market operating under a bond required by law or a bond required by the United States to secure the performance of the public livestock market's obligation. However, any such market operating as a livestock dealer or order buyer, or both, is subject to all provisions of this chapter except for the payment of the license fee required in RCW 20.01.040;

(4) Any retail merchant having a bona fide fixed or permanent place of business in this state, but only for the retail merchant's retail business conducted at such fixed or established place of business;

(5) Any person buying farm products for his or her own use or consumption;

(6) Any warehouseman or grain dealer licensed under the state grain warehouse act, chapter 22.09 RCW, with respect to his ((~~operations as a licensee under that act~~)) or her handling of any agricultural product as defined under that chapter;

(7) Any nurseryman who is required to be licensed under the horticultural laws of the state with respect to his or her operations as such licensee;

(8) Any person licensed under the now existing dairy laws of the state with respect to his or her operations as such licensee;

(9) Any producer who purchases less than fifteen percent of his or her volume to complete orders;

(10) Any person, association, or corporation regulated under chapter 67.16 RCW and the rules adopted thereunder while performing acts regulated by that chapter and the rules adopted thereunder;

(11) Any boom loader who loads exclusively his or her own hay or straw as the producer thereof.

Sec. 11. Section 3, chapter 452, Laws of 1987 and RCW 15.88.030 are each amended to read as follows:

(1) There is created an agricultural commodity commission to be known and designated as the Washington wine commission. Except as provided in RCW 15.88.100(2), the commission shall be composed of eleven voting members; five voting members shall be growers, five voting members shall be wine producers, and one voting member shall be a wine wholesaler licensed under RCW 66.24.200. Of the grower members, at least one shall be a person who does not have over fifty acres of vinifera grapes in production, at least one shall be a person who has over one hundred acres of vinifera grapes in production, and two may be persons who produce and sell their own wine. Of the wine producer members, at least one shall be a person producing not more than twenty-five thousand gallons of wine annually, at least one shall be a person producing over one million gallons of wine annually, and at least two shall be persons who produce wine from their own grapes. In addition, at least one member shall be a wine producer located in western Washington and at least two members shall be wine producers located in eastern Washington.

(2) In addition to the voting members identified in subsection (1) of this section, the commission shall have one nonvoting member who is a wine producer in this state whose principal wine or wines are produced from fruit other than vinifera grapes. The director of agriculture, or the director's designee, shall serve as an ex officio, nonvoting member.

(3) Except as provided in RCW 15.88.100(2), seven voting members of the commission constitute a quorum for the transaction of any business of the commission.

(4) Each voting member of the commission shall be a citizen and resident of this state and over the age of twenty-one years. Each voting member, except the member holding position eleven, must be or must have been engaged in that phase of the grower or wine producer industry that he or she is appointed to represent, and must during his or her term of office derive a substantial portion of income therefrom, or have a substantial investment in the growing of vinifera grapes or the production of wine from vinifera grapes as an owner, lessee, partner, or a stockholder owning at least ten percent of the voting stock in a corporation engaged in the growing of vinifera grapes or wine production from vinifera grapes; or the manager or executive officer of such a corporation. These qualifications apply throughout each member's term of office.

Sec. 12. Section 4, chapter 452, Laws of 1987 and RCW 15.88.040 are each amended to read as follows:

The appointive voting positions on the commission shall be designated as follows: The wine producers shall be designated positions one, two, three, four, and five; the growers shall be designated positions six, seven, eight, nine, and ten; and the wine wholesaler shall be position eleven. The nonvoting industry member shall be designated position number twelve. The member designated as filling position one shall be a person producing over one million gallons of wine annually. The member designated as position one shall be the sole representative, directly or indirectly, of the producer eligible to hold position one and in no event shall that producer directly or indirectly control more than fifty percent of the votes of the commission.

Except as provided in RCW 15.88.100(2), the regular terms of office shall be three years from the date of appointment and until their successors are appointed. However, the first terms of the members appointed upon July 1, 1987, shall be as follows: Positions one, six, and eleven shall terminate July 1, 1990; positions two, four, seven, and nine shall terminate July 1, 1989; and positions three, five, eight, and ten shall terminate July 1, 1988. The term of the initial nonvoting industry member shall terminate July 1, 1990.

Sec. 13. Section 10, chapter 452, Laws of 1987 and RCW 15.88.100 are each amended to read as follows:

(1) Except as provided in subsections (2) and (3) of this section, the vote of each of the voting members of the commission shall be weighted as provided by this subsection for the transaction of any of the business of the commission. The total voting strength of the entire voting membership of the commission shall be eleven votes. The vote of position one shall be equal to the lesser of the following: Five and one-half votes; or eleven votes times the percentage of the wine produced in the state that is produced by the person filling position one. The percentage shall be based upon the amount of wine produced in the previous calendar year and shall be rounded to the nearest ten percent. The remaining votes of the membership of the commission shall be divided equally among the remaining members of the commission.

(2) In the event the assessment described in RCW 66.24.215(1)(b) is not effective on July 1, 1989, the positions designated for growers cease to exist. In such an event, the commission shall be composed of six voting members and ((~~one~~)) two nonvoting members. The nonvoting industry member shall be position seven. Four voting members of the commission constitute a quorum for the modified commission. Of the six votes of the entire voting membership of the modified commission, the vote of position one shall be the lesser of the following: Three votes; or six votes times the percentage of the wine produced in the state that is produced by the person filling position one. The percentage shall be based upon the amount of wine produced in the previous calendar year and shall be rounded to the nearest ten percent. The remaining votes of the membership of the commission shall be divided equally among the remaining members of the commission.

(3) In the event that the percentage of wine produced by the producer represented by position one falls below twenty-five percent of the wine produced in this state, the weighted voting mechanism provided for in subsections (1) and (2) of this section shall cease to be effective. In that case, the voting shall be based on one vote per position.

NEW SECTION. Sec. 14. Section 13 of this act shall take effect July 1, 1989.

Sec. 15. Section 8, chapter 139, Laws of 1959 as last amended by section 4, chapter 304, Laws of 1977 ex. sess. and RCW 20.01.080 are each amended to read as follows:

Any person applying for a commission merchant's license shall include in his or her application a schedule of commissions, together with an itemized list of all charges for services to be rendered to a consignor and shall post a copy of such charges on his or her premises in a conspicuous place where it is clearly visible and available to consignors. In addition to the posting of the itemized list of charges, such list shall be distributed to each consignor along with each contract entered into between the consignor and the commission merchant. Such commissions and charges shall not be changed or varied for the license period except by written contract between the consignor or his or her agent and the licensee or thirty days after written notice to the director, and proper posting of such changes, as prescribed by the director, on the licensee's premises. Charges for services rendered and not listed on the schedule of commissions and charges filed with the director, or for increases in charges listed and filed which are directly caused by increases in labor rates or in cost of materials which occur after the signing of the contract by the grower, shall be rendered only on an actual cost to the licensee basis.

Sec. 16. Section 38, chapter 139, Laws of 1959 as last amended by section 33, chapter 296, Laws of 1981 and RCW 20.01.380 are each amended to read as follows:

Every dealer or cash buyer purchasing any agricultural products from the consignor thereof shall promptly make and keep for one year a correct record showing in detail the following:

(1) The name and address of the consignor.

(2) The date received.

(3) The terms of the sale.

(4) The quality and quantity delivered by the consignor, and where applicable the dockage, tare, grade, size, net weight, or quantity.

(5) An itemized statement of any charges paid by the dealer or cash buyer for the account of the consignor.

(6) The name and address of the purchaser: PROVIDED, That the name and address of the purchaser may be deleted from the record furnished to the consignor.

(7) A copy of the itemized list of charges required under RCW 20.01.080 in effect on the date the terms of sale were agreed upon.

A copy of such record containing the above matters shall be forwarded to the consignor forthwith.

Livestock dealers must also maintain individual animal identification and disposition records as may be required by law, or regulation adopted by the director.

Sec. 17. Section 42, chapter 139, Laws of 1959 and RCW 20.01.420 are each amended to read as follows:

((~~When requested by his consignor,~~)) A commission merchant shall, before the close of the next business day following the sale of any agricultural products consigned to him or her, transmit or deliver to the owner or consignor of the agricultural products a true written report of such sale, showing the amount sold, and the selling price.

Sec. 18. Section 46, chapter 139, Laws of 1959 as last amended by section 13, chapter 178, Laws of 1986 and RCW 20.01.460 are each amended to read as follows:

(1) Any person who violates the provisions of this chapter or fails to comply with the rules adopted under this chapter is guilty of a gross misdemeanor, except as provided in subsections (2) and (3) of this section.

(2) Any commission merchant, dealer, or cash buyer, or any person assuming or attempting to act as a commission merchant, dealer, or cash buyer without a license is guilty of a class C felony who:

(a) Imposes false charges for handling or services in connection with agricultural products.

(b) Makes fictitious sales or is guilty of collusion to defraud the consignor.

(c) Intentionally makes false statement or statements as to the grade, conditions, markings, quality, or quantity of goods shipped or packed in any manner.

(d) Fails to comply with the payment requirements set forth under RCW 20.01.010(10), 20.01.390 or 20.01.430.

(3) Any person who violates the provisions of RCW 20.01.040, 20.01.080, 20.01.120, 20.01.125, 20.01.410 or 20.01.610 has committed a civil infraction.

NEW SECTION. Sec. 19. The legislature finds that the agricultural sector of the state's economy is under severe financial stress due to low farm commodity prices, continuing high interest rates, and reduced net farm income. It is the declared purpose of this chapter to establish an emergency program which will serve and promote the public welfare of the state of Washington by assuring the viability of farm operations, preventing erosion of the tax base in rural areas, reducing foreclosures on farm property, and enhancing the financial stability of the agricultural industry.

NEW SECTION. Sec. 20. As used in this chapter, unless the context indicates otherwise, the following definitions apply:

(1) "Agricultural production" means the production of livestock, poultry, field crops, fruit, or other animal and vegetable matter for food or fiber.

(2) "Agricultural property" means:

(a) Real property that is principally used for agricultural production; and

(b) Personal property that is part of an agricultural production operation, including equipment, or used as security to finance such an operation.

(3) "College board" means the state board for community college education.

(4) "College" means the community college offering a program of financial consulting in closest proximity to the distressed farmer who applies for assistance under section 26 of this act.

(5) "Farmer" means a person who owns or operates a farm or ranch primarily for the purpose of agricultural production.

(6) "Mediator" means a person who has been trained under section 23 of this act in mediation and negotiation techniques, to serve as a negotiator between a farmer and a creditor as authorized under section 26 of this act.

(7) "Financial consultant" means a person who is or has been involved in production agriculture and who has been trained under section 23 of this act in financial planning and peer counseling.

(8) "Mediation process" means the agricultural assistance and consultation program provided for in section 21 of this act.

(9) "Creditor" means:

(a) The holder of a mortgage on agricultural property;

(b) A vendor of a contract for deed of agricultural property;

(d) A judgment creditor with a judgment against a debtor engaged in agricultural production; or

(e) A person who extends credit without perfected security interest to a farmer for the purchase of goods or services used in agricultural production.

NEW SECTION. Sec. 21. (1) The state board for community college education through the community college system shall establish an agricultural assistance and consultation program to aid financially distressed farmers in this state.

(2) The college board shall take reasonable measures to inform agricultural lenders and borrowers of this program.

(3) The college shall submit a mediation process, to be established at that college, to the college board for approval. As part of the mediation process, the college may make available to farmers the following types of assistance:

(a) Financial consulting, farm management consulting, and voluntary debt mediation as provided for in section 26 of this act; and

(b) Referral services for mental health assistance and support counseling.

NEW SECTION. Sec. 22. For the purpose of establishing the program, the college may:

(1) Utilize the services of:

(a) A network of trained peer counselors who can directly assist financially distressed farmers;

(b) The cooperative extension service and the college of agriculture at Washington State University;

(d) Legal service corporations, the University of Washington law school, or private law firms;

(e) Community service organizations;

(f) Private business;

(g) Professional associations;

(h) Regional mental health corporations;

(i) Volunteer organizations; and

(j) Any other person or entity.

(2) Contract for services with qualified personnel, including peer counselors, farm management specialists, accountants, attorneys, and mental health professionals, to provide the assistance required under section 21 of this act.

NEW SECTION. Sec. 23. For the purpose of administering the program, the college board shall:

(1) Provide training for financial consultants and mediators who are to provide services under this chapter; and

(2) Compile a directory of services available through the program.

NEW SECTION. Sec. 24. The college board may accept monetary or in-kind contributions, gifts, and grants provided to support the program.

NEW SECTION. Sec. 25. The college board may establish reasonable fees to defray the cost of providing financial consulting services under this chapter. The college board shall apply to the United States secretary of agriculture for a matching grant for this program under Title V, subtitle A of the agricultural credit act of 1987.

NEW SECTION. Sec. 26. (1) A farmer who is in danger of foreclosure on agricultural property may apply for entrance into the mediation process by filing an application with the college on a form prescribed by the college board.

(2) A farmer who participates in the mediation process shall authorize the release to the college of any information held by a creditor.

(3) Upon receipt of a properly completed application into the mediation process, the college may assign the farmer to a financial consultant. If this action relieves the financially distressed situation, mediation shall not be sought.

(4) If, upon completion of the financial consulting program, mediation is desired and recommended by the financial consultant, the college shall direct a mediator to meet with the farmer and creditor to assist in mediation. For purposes of this section, a financial consultant may also act as mediator if trained under section 23 of this act.

(5) Subject to the provisions of subsection (6) of this section, the college shall immediately terminate an attempt at mediation if at any time it finds that a creditor does not agree to participate in mediation.

(6) If mediation involves more than one creditor and any one creditor does not agree to participate in mediation, the college shall terminate mediation only insofar as it relates to that creditor.

NEW SECTION. Sec. 27. (1) If an agreement is reached between the farmer and a creditor, the mediator shall draft a written mediation agreement to be signed by the farmer and the creditor.

(2) A farmer and any creditor who are parties to a mediation agreement:

(a) Are bound by the terms of the agreement;

(b) May enforce the mediation agreement as a legal contract; and

NEW SECTION. Sec. 28. If a mediation agreement cannot be reached, the mediator shall recommend to the college that the mediation be concluded and mediation terminated.

NEW SECTION. Sec. 29. (1) All materials, data, and information received by the college with respect to any request filed under section 26 of this act are confidential and are not subject to examination or disclosure as public information.

(2) No official, employee, or agent of the college may knowingly disclose any materials, data, or information concerning a mediation request without the consent of the farmer and the creditor.

NEW SECTION. Sec. 30. Meetings between a farmer and any creditor conducted by a mediator are confidential and are not subject to the provisions of the open meeting law.

NEW SECTION. Sec. 31. All parties who voluntarily enter into the mediation process as described in this chapter shall waive their right to take civil action against the state of Washington and the designated financial consultant and mediator and thereby release the state and the designated financial consultant and mediator from any civil liability which may result from such activities.

NEW SECTION. Sec. 32. This program shall cease to exist April 1, 1991, unless extended by law for an additional fixed period of time.

NEW SECTION. Sec. 33. Sections 19 through 32 of this act shall constitute a new chapter in Title 7 RCW.

NEW SECTION. Sec. 34. This act is necessary for the immediate preservation of the public peace, health, and safety, the support of the state government and its existing public institutions, and sections 19 through 32 of this act shall take effect immediately.