SENATE BILL REPORT

SB 6344

BYSenators Barr, Hansen, Bailey and Anderson; by request of Department of Agriculture

Revising provisions relating to agriculture.

Senate Committee on Agriculture

Senate Hearing Date(s):January 21, 1988

Majority Report:  That Substitute Senate Bill No. 6344 be substituted therefor, and the substitute bill do pass.

      Signed by Senators Barr, Chairman; Anderson, Vice Chairman; Bailey, Hansen, Rinehart.

Senate Staff:Tom McDonald (786-7404)

                  January 21, 1988

AS REPORTED BY COMMITTEE ON AGRICULTURE, JANUARY 21, 1988

BACKGROUND:

Agricultural Local Fund:  Several agriculturally related statutes comprise the Agricultural Local Fund (the Fund).  Under the authority of each statute, the Department of Agriculture deposits in the Fund all the fees and fines collected in administering and enforcing the requirements and obligations directed by the statute.  Each statute also specifies the manner in which the monies collected under its authority are to be distributed.  An appropriation is not required for disbursement.

The Fund is considered an efficient means of collecting the fees and distributing the money needed to carry out the duties of the Department.  Several other fee generating statutes, however, are not in the Fund and remain as appropriated funds in the state treasury.  These include the Seed Act, the Fertilizer, Agricultural Mineral and Limes Act, the Animal Remedy Act, and the Commercial Feed Act.

 Controlled Atmosphere Storage Business Licensing:  A controlled atmosphere storage is a storage warehouse in which the atmospheric gases and the temperature are regulated to control the condition and maturity of fresh fruit and vegetables.  Under current statute, the Department may charge a $5.00 annual licensing fee for controlled atmosphere storage businesses.  This fee, however, does not cover the costs of administering this law.

Horticulture District Inspector:  Each county may establish a horticulture pest and disease board to more effectively control and prevent the spread of pests and diseases.  The board is comprised of four members appointed by the county commissioners and one member who is to be the "inspector at large" for the horticulture district.  However, the "inspector at large" position no longer exists in the Department, and the language of statute has become obsolete.

Frozen Products Labeling:  A retailer must label specific food fish and meat products as "frozen" if the products have been frozen "subsequent to being offered for sale or distribution to the ultimate consumer."  The time at which labeling must occur has been confusing and inconsistent with the poultry "frozen" labeling requirements.

Certificates to Food Processors:  Currently, the Department has no statutory authority to issue and charge a fee for sanitary certificates for food processors.  However, food processors, including the entire agri-business food processing community, are required to have a sanitary certificate by foreign countries for exported process foods.  Although the Department is now issuing the certificates, it is unable to recoup its costs.

 Commission Merchants Act:  The Commission Merchants Act requires businesses to be licensed and bonded.  Retail business activities are specifically exempt from this requirement.  Some businesses are attempting to avoid licensure and bonding by claiming that the retail portion of their business exempts them from the requirements for their wholesale activities.

SUMMARY:

 Agricultural Local Fund:  An agricultural local fund is established and will consist of money collected pursuant to specific statutory authority.  The money deposited in the Fund may only be expended in accordance with restrictions in the law.  No appropriation is required for disbursements from the Fund.  The fees, fines and other monies collected under the Seed Act, the Fertilizer, Agricultural Minerals and Limes Act, the Animal Remedy Act and the Commercial Seed Act are placed into the Agricultural Local Fund.

Controlled Atmosphere Storage Business Licensing:  The increased fee provisions for licensing controlled atmosphere storage businesses are made by the rule making process.

 Horticulture District Inspector:  The Director of the Department of Agriculture has authority to appoint the fifth member of the board.

 Frozen Products Labeling:  Any food fish or meat products, as defined in law, must be labeled in a "frozen state" before sale if the product has been frozen "at any time."

 Certificates to Food Processors:  The Department has authority to issue and charge for sanitary certificates to food processors.  The sanitary certificate is not mandatory and has a fee charge of $20.00.

Commission Merchants Act:  A retailer is exempt from the licensing and bonding requirements of the Commission Merchants Act only for the retail business conducted at the place of business.

EFFECT OF PROPOSED SUBSTITUTE:

The Director of the Department of Agriculture is added as an ex officio, nonvoting member to the Wine Commission.  This is consistent with the Director's involvement in all other commodity commissions.

Appropriation:    none

Revenue:    yes

Fiscal Note:      requested January 19, 1988

Senate Committee - Testified: Mike Schwisow, Deputy Director, State Department of Agriculture