HOUSE BILL REPORT

SB 5076

As Reported by House Committee On:

Agriculture & Natural Resources

Title: An act relating to creating the Washington grain commission.

Brief Description: Creating the Washington grain commission.

Sponsors: Senators Schoesler and Hatfield.

Brief History:

Committee Activity:

Agriculture & Natural Resources: 3/13/09, 3/20/09 [DPA].

Majority Report: Do pass as amended. Signed by 12 members: Representatives Blake, Chair; Jacks, Vice Chair; Chandler, Ranking Minority Member; Smith, Assistant Ranking Minority Member; Grant-Herriot, Kretz, Liias, McCoy, Nelson, Ormsby, Pearson and Warnick.

Staff: Jason Callahan (786-7117)

Background:

There are 25 agricultural commodity commissions in Washington. These commissions are

formed primarily to engage in research and marketing for their specific commodity. The

activities of commodity commissions are funded primarily by assessments on the producers

of the commodities.

Of the 25 commodity commissions, seven were formed directly by an act of the Legislature.

These include the Apple Commission, the Honey Bee Commission, and the Wine

Commission. These commissions have their own individual procedures and protocols.

The remaining 18 commodity commissions were created by order of the Director of the

Washington State Department of Agriculture (WSDA). Commissions created by the WSDA

follow the same general procedures. Examples of these commissions include the Asparagus

Commission, the Seed Potato Commission, the Red Raspberry Commission, the Barley

Commission, and the Wheat Commission.

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Summary of Amended Bill:

The Wheat Commission and the Barley Commission are dissolved and replaced by the

Washington Grain Commission (Commission), an agency of state government overseen by

the Director of the WSDA. All authorities, powers, and duties vested in the predecessor

commissions, along with all obligations, property, and employees, are transferred to the new

Commission.

The Commission is composed of five wheat producer members, two barley producer

members, two members representing the wheat industry, one member representing the barley

industry, and an appointee of the WSDA. The Commission's set jurisdiction is composed of

the following counties: Adams, Asotin, Benton, Chelan, Columbia, Douglas, Ferry,

Franklin, Garfield, Kittitas, Klickitat, Lincoln, Okanogan, Pend Oreille, Spokane, Stevens,

Walla Walla, Whitman, and Yakima.

Commission members are appointed by the WSDA. Industry members are appointed by the

Director of the WSDA, based on a recommendation forwarded by the Commission. The

producer members are also appointed by the Director of the WSDA; however, the process

involves formal nominating petitions and advisory ballots voted upon by wheat and barley

producers.

The wheat and barley producer Commission members must be state residents over the age of

18; however, industry representatives may be residents of a different state as long as the

person is involved with the handling, marketing, transportation, processing, or researching of

wheat or barley in Washington. The jurisdiction of the Commission is broken into five

districts for wheat and seven districts for barley. Each district must be represented on the

Commission by a producer from that district. All Commission members are specifically

authorized to also be members of other associations with similar objectives to the

Commission.

Other than the appointee of the WSDA, Commission members serve three-year terms. The

initial members of the Commission are the existing members of the Wheat Commission and

three members of the Barley Commission. The initial Commission members will serve

staggered terms until the permanent term schedule is established.

Commission members may be removed by the Director of the WSDA if the majority of the

Commission votes to recommend the member's removal. Commission members may only be

removed for cause. Reasons for removal include excessive absence, abandonment of the

position, acts of dishonesty, and willful misconduct.

Commission meetings must be held at least quarterly, including one annual meeting.

Meetings must be pre-determined prior to the start of the calendar year, and the proposed

Commission budget must be presented at the annual meeting. Commission members do not

receive compensation for service but are eligible for travel reimbursement.

The Commission is expressly granted with a range of authorities relating to the promotion,

marketing, and research of grains, and is provided with the authority to adopt rules and enter

into contracts to further its mission. The Commission is also allowed to accept donations of

liquor made from Washington-grown wheat or barley, and to disseminate the liquor without

charge for agricultural trade promotion or development.

The Commission has the authority to assess a levy on the commercial production of wheat

and barley. The initial assessment rates are those originally established by the Commission's

two predecessor commissions. For wheat, the initial assessment is 0.75 percent of the net

receipts at the first point of sale. For barley, the initial assessment is 1 percent of the net

receipts at the first point of sale. Assessment rates can be proposed by the Commission, and

with the assent of the Director of the WSDA, changes in assessment rates can be put to

referendum for the producers to vote upon. A change in an assessment rate is considered

approved if more than 50 percent of producers, by number of individuals and by volume of

grain, vote for the referendum. Assessments may be temporally reduced with just a vote of

the Commission.

The WSDA oversees the Commission; however, the Commission is responsible for

reimbursing the WSDA for the costs of that oversight and assistance. Costs that may be

incurred by the WSDA are rulemaking costs, the facilitation of appointment nominations and

advisory votes, and staff time dedicated to the Commission.

It is a misdemeanor for any person to violate any rule adopted by the Commission. It is also

a misdemeanor to submit fraudulent information requested or required by the Commission,

or to fail to submit any requested report or filing. The Superior Court has the authority to

enforce the actions of the Commission.

Amended Bill Compared to Original Bill:

The amended bill corrects terminology relating to how the Commission handles funds under its control.

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Appropriation: None.

Fiscal Note: Available.

Effective Date of Amended Bill: The bill takes effect 90 days after adjournment of the session in which the bill is passed.

Staff Summary of Public Testimony:

(In support) Combining the two commissions saves overhead and allows resources to be combined. The proposal was the subject of an advisory vote between members of the two commissions. The growers showed that they want a unified commission.

(With concerns) The public disclosure piece should be changed to allow citizens to access the records of the agency and not just a report composed with the intent of sharing it with the public. Language should be clarified so that in-state printing companies have the first shot at bidding for print work ordered by the new commission.

(Opposed) None.

Persons Testifying: (In support) Heather Hansen, Washington Association of Wheat Growers; and Ben Buchholz, Washington State Council of Farmer Cooperatives.

(With concerns) Rowland Thompson, Allied Daily Newspapers; and Bill Stauffacher, Northwest Printing and Publishing.

Persons Signed In To Testify But Not Testifying: None.