HOUSE BILL REPORT
SSB
6393
As Reported By
House Committee on:
Agriculture
& Rural Development
Appropriations
Title: An act relating to milk producers and
distributors and food processors.
Brief
Description:
Instituting fees on dairy producers and handlers and food processors to support
WSDA food safety inspection program.
Brief History:
Reported by House Committee on:
Agriculture & Rural
Development, February 27, 1992, DPA;
Appropriations, March 2,
1992, DPA(AG/APP)s.
HOUSE COMMITTEE ON
AGRICULTURE
& RURAL DEVELOPMENT
Majority
Report:
Do pass as amended. Signed by 9 members: Representatives Rayburn,
Chair; Kremen, Vice Chair; Nealey, Ranking Minority Member; P. Johnson,
Assistant Ranking Minority Member; Chandler; Grant; R. Johnson; Rasmussen;
and Roland.
Minority
Report:
Do not pass. Signed by 2 members: Representatives Lisk and McLean.
Staff: Kenneth Hirst (786-7105).
Background:
Under the fluid
milk laws, all persons who transport, sell, or store milk must be licensed.
This includes each operator of a milk plant. Assessments are levied on milk to
support the activities of the state's Dairy Products Commission. If a milk
pooling plan were proposed and adopted, an assessment would also be levied on
all milk sold or received in the milk marketing area created under the plan.
With certain
exceptions, no person may operate a food processing plant without obtaining an
annual license from the Department of Agriculture. The fee for such a license
is $25 and a penalty for late payment of the fee is $15. All monies collected
under the laws requiring such licensure are paid to the state treasurer.
The Agricultural
Local Fund is not subject to appropriation.
Summary of
Substitute Bill:
Milk
Assessment.
For the two years beginning July 1, 1992, an assessment of not more than
$0.005/hundred weight is levied on all milk processed in the state. The
assessment is in an amount which the director of the Department of Agriculture
determines by rule will, with general fund monies, support an inspection
program to maintain compliance with an interstate pasteurized milk ordinance.
The assessments are levied on the operator of the first milk plant receiving
the milk for processing. They are to be paid to the director monthly and
deposited in a dairy inspection account which is created within the
Agricultural Local Fund. Monies from the account may be used only to provide
inspection services to the dairy industry. Interest on monies in the account
accrue to the inspection program. A lien is established for delinquent
assessments which has the same priority and is to be collected in the same
manner as delinquent taxes.
Advisory
Committee.
An advisory committee is created to review this dairy inspection program and to
consider alternatives. It must issue a preliminary report of its findings by
October 15, 1992. The committee must report to the House and Senate
Agriculture Committees its recommendations regarding the long-term funding and
structure of the program by December 1, 1992.
Food Processor
Fees.
The annual license fee charged food processors licensed under the state's Food
Processing Act is increased. Rather than being $25 for all licensees, the fee
is based on annual gross sales and ranges from $50 for a processor with sales
of up to $50,000 to $750 for a processor with sales of over $10 million. The
delinquency fee is increased from being $15 for any licensee to being 10
percent of the license fee.
Rather than being
paid into the state treasury, all monies received by the department under the
Food Processing Act are to be deposited in a food processing inspection account
created within the Agricultural Local Fund. Monies from the account may be
used only for carrying out the provisions of the Food Processing Act and the
state's Food, Drug, and Cosmetic Act.
Amended Bill
Compared to Substitute Bill: The substitute Senate bill requires milk
producers to secure a new permit and pay a new permit fee; this requirement is
eliminated by the amendment. The amendment also: increases to $0.005/hundred
weight (from $0.003/hundred weight) the maximum assessment that may be levied
under the bill on milk processed in the state and creates the accounts in the
Agricultural Local Fund into which fees are deposited under the substitute
Senate bill.
Fiscal
Note:
Not requested.
Effective
Date of Substitute Bill: Ninety days after adjournment of session in which
bill is passed.
Testimony
For:
(1) Milk producers in Snohomish County were delisted by a federal inspector for
interstate shipments of milk; the delisting cost the producers approximately
$500,000. The dairy inspection program needs to be enhanced to help prevent
future delistings, but the Department of Agriculture's budget is being cut.
This bill is needed to fund inspections. (2) Most states have a user fee
system to support programs such as this. (3) The increase in licensing fees
for food processors is needed to provide an increased level of inspection by
the department for food safety. The increased level of inspection will provide
insurance against a consumer scare based on food safety issues.
Testimony
Against: None.
Witnesses: Senator Bailey (in favor);
Dan Coyne and Dennis Felt, Washington State Dairy Federation (in favor); Bill
Fritz, Washington Food Processors Association (in favor); and John Daley,
Department of Agriculture (in favor).
HOUSE COMMITTEE ON
APPROPRIATIONS
Majority
Report:
Do pass as amended by Committee on Agriculture & Rural Development as
such amendment is amended by Committee on Appropriations. Signed by 18
members: Representatives Locke, Chair; Inslee, Vice Chair; Spanel, Vice Chair;
Silver, Ranking Minority Member; Appelwick; Brekke; Dorn; Ebersole; Ferguson;
Hine; May; Nealey; Peery; Pruitt; Rust; Sprenkle; Vance; and Wang.
Minority
Report:
Do not pass. Signed by 7 members: Representatives Morton, Assistant
Ranking Minority Member; Bowman; Carlson; Fuhrman; Lisk; Mielke; and Wineberry.
Staff: Susan Nakagawa (786-7145).
Summary of
Recommendation of Committee on Appropriations Compared to Recommendation of
Committee on Agriculture and Rural Development: Language directing interest earnings from
assessments into the Agricultural Local Fund is stricken.
Fiscal
Note:
Available.
Effective
Date: Ninety days after adjournment of session in which bill is passed.
Testimony
For:
Legislation is necessary to adequately fund the dairy inspection program.
General fund support has not been adequate to support the program.
Testimony
Against: The burden of assessments is unfairly borne by milk processors. A
more equitable distribution would assess both processors and producers.
Witnesses: John Daley, Department of
Agriculture; Dan Coyne, Washington State Dairy Association; and Ann Gygi,
Washington Dairy Processors Association.