AN ACT
Relating to state milk marketing orders; amending RCW 15.35.080, 41.06.084,
15.35.110, 15.35.150, and 15.35.310; and adding a new section to chapter 15.35
RCW.
BE IT ENACTED BY THE LEGISLATURE
OF THE STATE OF WASHINGTON:
Sec.
1. RCW
15.35.080 and 1991 c 239 s 4 are each amended to read as follows:
For
the purposes of this chapter:
(1)
"Department" means the department of agriculture of the state of
Washington;
(2)
"Director" means the director of the department or the director's
duly appointed representative;
(3)
"Person" means a natural person, individual, firm, partnership, corporation,
company, society, and association, and every officer, agent, or employee
thereof. This term shall import either the singular or plural as the case may
be;
(4)
"Market" or "marketing area" means any geographical area
within the state comprising one or more counties or parts thereof, or one or
more cities or towns or parts thereof where marketing conditions are
substantially similar and which may be designated by the director as one
marketing area;
(5)
"Milk" means all fluid milk from cows as defined in ((chapters
15.32 and 15.36)) RCW 15.36.011 as enacted or hereafter amended and
rules adopted thereunder;
(6)
"Milk products" includes any product manufactured from milk or any
derivative or product of milk;
(7)
"Milk dealer" means any person engaged in the handling of milk in his
or her capacity as the operator of a milk plant, as that term is defined in
RCW 15.36.040 as enacted or hereafter amended and rules adopted thereunder:
(a)
Who receives milk in an unprocessed state from dairy farms, and who processes
milk into milk or milk products; and
(b)
Whose milk plant is located within the state or ((of any other plant))
from ((which)) whose milk plant milk or milk products that are
produced at least in part from milk from producers are disposed of to any place
or establishment within a marketing area;
(8)
"Producer" means a person producing milk within this state for sale
under a grade A milk permit issued by the department under the provisions of
chapter 15.36 RCW as enacted or hereafter amended;
(9)
"Classification" means the classification of milk into classes
according to its utilization by the department;
(10) The
terms "plan," "market area and pooling arrangement,"
"market area pooling plan," "market area and pooling plan,"
"market pool," and "market plan" all have the same meaning;
(11)
"Producer-dealer" means a producer who engages in the production of
milk and also operates a plant from which an average of more than three hundred
pounds daily of milk products, except filled milk, is sold within the marketing
area and who has been so designated by the director. A state institution which
processes and distributes milk of its own production shall be considered a
producer-dealer for purposes of this chapter, but the director may by rule exempt
such state institutions from any of the requirements otherwise applicable to
producer-dealers.
NEW
SECTION. Sec. 2. A new
section is added to chapter 15.35 RCW to read as follows:
(1)
Not less than sixty days before a referendum creating a market area and pooling
plan with quotas is to be conducted under RCW 15.35.110, the director shall
notify each producer-dealer regarding the referendum. Any producer-dealer may
choose to vote on the referendum and each choosing to do so shall notify the
director in writing of this choice not later than thirty days before the
referendum is conducted. Such a producer-dealer and any person who becomes a
producer-dealer or producer by acquiring the quota of such a producer-dealer
shall be a fully regulated producer under such an approved plan and shall
receive a quota which is not less than the sales of milk in fluid form from the
producer facilities during the reference period used by the director in
determining quotas for producers. Such a producer-dealer shall also be a fully
regulated dealer under the terms of such an approved plan. RCW 15.35.310(1)
does not apply to a producer-dealer who is subject to regulation under this
subsection.
(2) If
a person was not a producer-dealer at the time notice was provided to
producer-dealers under subsection (1) of this section regarding a referendum on
a proposed market area and pooling plan with quotas, the plan was approved by
referendum, and the person subsequently became a producer-dealer (other than by
virtue of the person's acquisition of the quota of a producer-dealer who is
fully regulated under the plan), the person is subject to all of the terms of
the plan for producers and dealers during the duration of the plan and RCW
15.35.310(1) does not apply to such a person with regard to that plan.
(3)
This subsection applies: To a person who was a producer-dealer at the time the
notice was provided to producer-dealers under subsection (1) of this section
regarding a referendum which was approved and who did not notify the director
under subsection (1) of this section to vote in that referendum; and to a
person who acquires the facility of such a person.
If
such a person's sales of milk in fluid form subsequent to the adoption of the
plan increases such that those sales in any year are more than fifty percent
greater than the sales of milk in fluid form from the producer facilities
during any of the previous five years, RCW 15.35.310(1) does not apply to that
person with regard to that plan. Such a producer-dealer shall be a fully
regulated producer under such an approved plan and shall receive a quota which
is not less than the producer-dealer's sales of milk in fluid form during the
reference period used by the director in determining quotas for producers.
Such a producer-dealer shall also be a fully regulated dealer under the terms
of such an approved plan.
If
changes are made, on a market area-wide basis, to the quotas established under
the plan, the director shall by rule adjust the fifty percent limitation
provided by this section by an equivalent amount.
Sec.
3. RCW
41.06.084 and 1990 c 37 s 2 are each amended to read as follows:
In
addition to the exemptions set forth in RCW 41.06.070, the provisions of this
chapter shall not apply in the department of agriculture to the director, the
director's confidential secretary, the deputy director, not more than eight
assistant directors, ((and)) the state veterinarian, and the milk
pooling administrator employed under RCW 15.35.100.
Sec.
4. RCW
15.35.110 and 1991 c 239 s 8 are each amended to read as follows:
(1)
The director, either upon his or her own motion or upon petition by ten percent
of the producers in any proposed area, shall conduct a hearing to determine
whether to establish or discontinue a market area pooling arrangement. Upon
determination by the director that in order to satisfy the purposes of this
chapter a pooling arrangement should be established, a referendum of affected
individual producers and milk dealers shall be conducted by the department.
(2) In
order for the director to establish a market area and pooling plan:
(a)
Sixty-six and two-thirds percent of the producers and producer-dealers
that vote must be in favor of establishing a market area and pooling plan; ((and))
(b)
Sixty-six and two-thirds percent of the milk dealers and producer-dealers
that vote must be in favor of establishing a market area and pooling plan; and
(c)
Producer-dealers providing notice to the director under section 2(1) of this
act, shall be authorized to vote both as producers and as milk dealers.
The
director, within sixty days from the date the results of the referendum are
filed with the secretary of state, shall establish a market pool in the market
area, as provided for in this chapter.
(3) If
fifty-one percent of the producers and producer-dealers voting
representing fifty-one percent of the milk produced in the market area vote to
terminate a pooling plan, the director, within one hundred twenty days, shall
terminate all the provisions of said market area and pooling arrangement.
(4) A
referendum of affected producers, producer-dealers, and milk dealers
shall be conducted only when a market area pooling arrangement is to be
established ((or terminated)). Only producers and producer-dealers
who are subject to the plan may vote on the termination of a pooling plan.
Sec.
5. RCW
15.35.150 and 1991 c 239 s 11 are each amended to read as follows:
(1)
Under a market pool and as used in this section, "quota" means a
producer's or producer-dealer's portion of the total sales of milk in
fluid form in a market area plus a reserve determined by the director.
(2)
The director may in each market area subject to a market plan establish each
producer's and each producer-dealer's initial quota in the market area.
Such initial quotas shall be determined by the department after due
notice and the opportunity for a hearing as provided in chapter 34.05 RCW. In
making this determination, consideration shall be given to a history of the
producer's production record. In no case shall a producer-dealer receive as
a quota an amount which is less than his or her fluid milk sales for the
reference period used by the director in determining quotas for other
producers.
In any
system of establishing quotas, provision shall be made for new producers to
qualify for allocation of quota in a reasonable proportion and for old and new
producers to participate in any new increase in fluid milk sales in a
reasonable proportion. The director may establish a method to proportionately
decrease quota allocations in the event decreases in fluid milk consumption
occur.
All
subsequent changes or new quotas issued shall be determined by the
department after due notice and the opportunity for a hearing as provided in
chapter 34.05 RCW.
Sec.
6. RCW
15.35.310 and 1991 c 239 s 16 are each amended to read as follows:
(1) Except
as provided in section 2 of this act, the provisions of this chapter shall
not apply to persons designated as producer-dealers, except that:
(a)
The director may require pursuant to RCW 15.35.100 any information deemed
necessary to verify a producer-dealer's status as a producer-dealer; and
(b) A
producer-dealer shall comply with all requirements of this chapter applicable
to milk dealers, except those which the director may deem unnecessary.
(2)
The director shall upon request designate producer-dealers and adopt rules
governing eligibility for designation of a producer-dealer and cancellation of
such designation. To receive such designation, a producer-dealer shall, at a
minimum:
(a) In
its capacity as a handler, have and exercise complete and exclusive control
over the operation and management of a plant at which it handles and processes
milk received from its own milk production resources and facilities as
designated in subsection (4)(a) of this section, the operation and management
of which are under the complete and exclusive control of the producer-dealer in
its capacity as a dairy farmer;
(b)
Neither receive at its designated milk production resources and facilities nor
receive, handle, process, or distribute at or through any of its milk handling,
processing, or distributing resources and facilities, as designated in
subsection (4)(b) of this section, milk products for reconstitution into fluid
milk products, or fluid milk products derived from any source other than (i)
its designated milk production resources and facilities, (ii) other milk
dealers within the limitation specified in subsection (2)(e) of this section,
or (iii) nonfat milk solids which are used to fortify fluid milk products;
(c)
Neither be directly nor indirectly associated with the business control or
management of, nor have a financial interest in, another dealer's operation;
nor shall any other dealer be so associated with the producer-dealer's
operation;
(d)
Not allow milk from the designated milk production resources and facilities of
the producer-dealer to be delivered in the name of another person as producer
milk to another handler; and
(e)
Not handle fluid milk products derived from sources other than the designated
milk production facilities and resources, except for fluid milk product
purchased from pool plants which do not exceed in the aggregate a daily average
during the month of one hundred pounds.
(3)
Designation of any person as a producer-dealer following a cancellation of its
prior designation shall be preceded by performance in accordance with
subsection (2) of this section for a period of one month.
(4)
Designation of a person as a producer-dealer shall include the determination
and designation of the milk production, handling, processing, and distributing
resources and facilities, all of which shall be deemed to constitute an
integrated operation, as follows:
(a) As
milk production resources and facilities: All resources and facilities,
milking herd, buildings housing such herd, and the land on which such buildings
are located, used for the production of milk:
(i)
Which are directly, indirectly, or partially owned, operated, or controlled by
the producer-dealer;
(ii)
In which the producer-dealer in any way has an interest including any
contractual arrangement; and
(iii)
Which are directly, indirectly, or partially owned, operated, or controlled by
any partner or stockholder of the producer-dealer. However, for purposes of
this item (4)(a)(iii) any such milk production resources and facilities which
the producer-dealer proves to the satisfaction of the director do not
constitute an actual or potential source of milk supply for the
producer-dealer's operation as such shall not be considered a part of the
producer-dealer's milk production resources and facilities; and
(b) As
milk handling, processing, and distributing resources and facilities: All
resources and facilities including store outlets used for handling, processing,
and distributing any fluid milk product:
(i)
Which are directly, indirectly, or partially owned, operated, or controlled by
the producer-dealer; or
(ii)
In which the producer-dealer in any way has an interest, including any
contractual arrangement, or with respect to which the producer-dealer directly
or indirectly exercises any degree of management or control.
(5)
Designation as a producer-dealer shall be canceled automatically upon
determination by the director that any of the requirements of subsection (2) of
this section are not continuing to be met, such cancellation to be effective on
the first day of the month following the month in which the requirements were
not met, or the conditions for cancellation occurred.
