WSR 97-09-095

PROPOSED RULES

DEPARTMENT OF AGRICULTURE

[Filed April 23, 1997, 10:58 a.m.]

Original Notice.

Preproposal statement of inquiry was filed as WSR 97-05-067.

Title of Rule: Chapter 16-532 WAC.

Purpose: Amend chapter 16-532 WAC to change the assessment and collection procedures of the Hop Board and add new hop varieties subject to labeling requirements.

Statutory Authority for Adoption: RCW 15.65.050.

Statute Being Implemented: Chapter 15.65 RCW.

Summary: The rule (1) adds a definition for "processed" hops to the marketing order; (2) requires a person subject to assessments to pay assessments from the date of processing when hops are processed prior to the first sale and submit an inventory report to the board on hops which are not processed or sold prior to December 31 of the year in which they are produced; and (3) adds six new commercial varieties of hops to the labeling requirements.

Reasons Supporting Proposal: (1) The Hop Board has the fiduciary responsibility to prepare budgets covering anticipated income and expenses and conduct advertising and research programs that benefit hop growers. Changes in hop processing technology and marketing channels have made assessment collection methods and budgeting less effective. (2) New varieties of hops have been released for commercial use.

Name of Agency Personnel Responsible for Drafting: Walter Swenson, Washington State Department of Agriculture, 1111 Washington Street, Olympia, WA, (360) 902-1928; Implementation and Enforcement: Ann George, Hop Commission, 504 North Naches Avenue, Yakima, WA, (509) 453-4749.

Name of Proponent: Washington Hop Commission, governmental.

Agency Comments or Recommendations, if any, as to Statutory Language, Implementation, Enforcement, and Fiscal Matters: Affected producers must approve the rule in compliance with RCW 15.65.160, which requires a referendum of the growers, before the rule becomes effective.

Rule is not necessitated by federal law, federal or state court decision.

Explanation of Rule, its Purpose, and Anticipated Effects: The proposed rule adds a definition for "processed" hops to the marketing order to conform with technological changes in the industry. The rule will also require a person subject to assessments to pay assessments to the board from the date of processing if hops are processed prior to the first sale and requires the producer to report to the board any hops produced that year that were not sold or processed by December 31. The rule will provide the Hop Board with a more accurate projection of anticipated income to budget for research and promotion programs that will benefit the hop growers. The new varieties added to the labeling requirement of the board will give growers additional marketing opportunities for Washington grown hops.

Proposal Changes the Following Existing Rules: The proposal will add the definition of "processed" to the marketing order and change the assessment and reporting requirements for some producers subject to assessments. The assessment due date for producers that process hops prior to sale will be from the date of processing rather than from the date of sale. Growers with unsold or unprocessed hops on December 31 of the year produced will now be required to report the inventory of unsold or unprocessed hops to the board by January 31 of the following year. Adding the new commercial varieties of hops to the marketing order will increase the number of varieties subject to labeling requirements from twenty-six to thirty-two.

No small business economic impact statement has been prepared under chapter 19.85 RCW. There will be minimal cost to businesses for compliance with the rule change. The new inventory reporting requirement is a minor administrative requirement that will affect only a small percentage of the ninety-four affected producers that grow and sell hops. A majority of the growers sell or process their hops during the year they are produced.

Section 201, chapter 403, Laws of 1995, does not apply to this rule adoption. Washington Department of Agriculture is not a listed agency under section 201.

Hearing Location: Washington State University, WSU - IAREC, 24106 North Bunn Road, Prosser, WA, on June 10, 1997, at 9:00 a.m.

Assistance for Persons with Disabilities: Contact Cathy Jensen by June 3, 1997, TDD (360) 902-1996, or (360) 902-1976.

Submit Written Comments to: Walter Swenson, P.O. Box 42560, Olympia, WA 98504-2560, FAX (360) 902-2089, by June 10, 1997.

Date of Intended Adoption: August 20, 1997.

April 23, 1997

William E. Brookreson

Assistant Director

Agency Operations

AMENDATORY SECTION (Amending WSR 96-15-139, filed 7/24/96, effective 8/24/96)

WAC 16-532-010 Definitions. For the purpose of this marketing order:

(1) "Director" means the director of agriculture of the state of Washington or his duly appointed representative.

(2) "Department" means the department of agriculture of the state of Washington.

(3) "Act" means the Washington State Agricultural Enabling Act of 1961 or chapter 15.65 RCW.

(4) "Person" means any person, firm, association or corporation.

(5) "Affected producer" or "producer" means any person who produces hops in commercial quantities in the state of Washington.

(6) "Commercial quantity" means any hops produced for market by a producer in any calendar year.

(7) "Handler" means any person who acts as principal or agent or otherwise in processing, selling, marketing, or distributing hops not produced by him.

(8) "Hop commodity board" hereinafter referred to as "board" means the commodity board formed under the provisions of WAC 16-532-020.

(9) "Hops" means and includes all kinds and varieties of "humulus lupulus" grown, picked and dried in the state of Washington, whether loose, packaged or baled and all oils, extracts and/or lupulin derived therefrom.

(10) "Processed" means and includes all hops which are converted into pellets, extracts, oils, lupulin, and/or other forms, including hops which are frozen in undried form, but excluding whole, dried hop cones, whether loose or baled.

(11) "Marketing season" means the twelve month period beginning with January 1 of any year and ending December 31, both dates being inclusive.

(((11))) (12) "Producer-handler" means any person who acts both as a producer and as a handler with respect to hops. A producer-handler shall be deemed to be a producer with respect to the hops which he produces and a handler with respect to the hops which he handles, including those produced by himself.

(((12))) (13) "Affected area" means the state of Washington.

(((13))) (14) "Sell" includes offer for sale, expose for sale, have in possession for sale, exchange, barter or trade.

(((14))) (15) "Affected unit" means two hundred pounds net of hops, or the amount of lupulin, extract or oil produced from two hundred pounds net of hops.

(((15))) (16) "Promotional hosting" as used in these rules means the hosting of individuals and groups of individuals at meetings, meals, and gatherings for the purpose of cultivating trade relations and promoting sales of Washington grown hops.

(((16))) (17) "Hosting" may include providing meals, refreshments, lodging, transportation, gifts of nominal value, reasonable and customary entertainment, and normal incidental expenses at meetings or gatherings.

(((17))) (18) "Affiliate" as used in these rules, means a corporation, limited liability company, partnership, or other entity in common ownership with a producer or producer-handler.

[Statutory Authority: RCW 15.65.050 and 15.65.430. 96-15-139, 16-532-010, filed 7/24/96, effective 8/24/96. Statutory Authority: Chapter 15.65 RCW. 92-09-068, 16-532-010, filed 4/14/92, effective 5/15/92; Marketing Order Article I, A, filed 7/1/64.]

AMENDATORY SECTION (Amending Order 5077, filed 8/23/95, effective 9/23/95 WAC 16-532-040 Assessments and collections. (1) Assessments.

(a) The annual assessment on all varieties of hops shall be two dollars and fifty cents per affected unit.

(b) For the purpose of collecting assessments the board may:

(i) Require handlers to collect producer assessments from producers whose production they handle, and remit the same to the board; or

(ii) Require the person subject to the assessment to give adequate assurance or security for its payment; or

(iii) Require the person subject to the assessment to remit assessments for any hops which are processed prior to the first sale; or

(iv) Require the person subject to the assessment to remit an inventory report for any hops which are not processed or sold prior to December 31 of the year in which they are produced.

(c) Subsequent to the first sale or processing, no affected units shall be transported, carried, shipped, sold, marketed, or otherwise handled or disposed of until every due and payable assessment herein provided for has been paid and the receipt issued. The foregoing shall include all affected units shipped or sold, both inside and outside the state.

(2) Collections. Any moneys collected or received by the board pursuant to the provisions of the order during or with respect to any season or year may be refunded on a pro rata basis at the close of such season or year or at the close of such longer period as the board determines to be reasonably adapted to effectuate the declared policies of this act and the purposes of such marketing agreement or order, to all persons from whom such moneys were collected or received or may be carried over into and used with respect to the next succeeding season, year or period whenever the board finds that the same will tend to effectuate such policies and purposes.

(3) Penalties. Any due and payable assessment herein levied in such specified amount as may be determined by the board pursuant to the provisions of the act and the order, shall constitute a personal debt of every person so assessed or who otherwise owes the same, and the same shall be due and payable to the board when payment is called for by it. In the event any person fails to pay the board the full amount of such assessment or such other sum on or before the date due, the board may, and is hereby authorized to add to such unpaid assessment or sum an amount not exceeding ten percent of the same to defray the cost of enforcing the collecting of the same. In the event of failure of such person or persons to pay any such due and payable assessment or other such sum, the board may bring a civil action against such person or persons in a state court of competent jurisdiction for the collection thereof, together with the above specified ten percent thereon, and such action shall be tried and judgment rendered as in any other cause of action for debt due and payable.

[Statutory Authority: RCW 15.65.050. 95-17-118 (Order 5077), 16-532-040, filed 8/23/95, effective 9/23/95. Statutory Authority: Chapter 15.65 RCW. 91-15-019 (Order 2090), 16-532-040, filed 7/10/91, effective 8/10/91. Statutory Authority: RCW 15.65.170. 87-10-059 (Order 1927), 16-532-040, filed 5/6/87, effective 6/8/87. Statutory Authority: Chapter 15.65 RCW. 83-16-041 (Order 1800), 16-532-040, filed 7/29/83; 80-05-090 (Order 1686), 16-532-040, filed 5/1/80; 79-01-045 (Order 1593), 16-532-040, filed 12/21/78; Order 1332, 16-532-040, filed 1/17/74; Marketing Order Article IV, A through C, filed 7/1/64.]

AMENDATORY SECTION (Amending WSR 92-09-068, filed 4/14/92, effective 5/15/92)

WAC 16-532-110 Requirements for collection of assessments. (1) Assessments on all hops marketed or processed shall be paid at the rate specified in WAC 16-532-040 to the hop commodity board (commission) by the first handler receiving or handling such hops for or from a producer, or by the producer if processing occurs before the first sale. Such assessments shall be deducted from the payment to be made by such handler to the producer.

(2) Payment of such assessment shall be due and payable on the tenth day of the second calendar month following the receiving or delivery to said first handler or the assumption of control of a producer's hops, or following the date of processing, if processed prior to the first sale, by said first handler or producer.

(3) An inventory report on all hops which are not marketed or processed prior to December 31 of the year in which those hops are produced shall be submitted by the producer no later than January 31 of the following year.

(4) Any handler or producer failing to pay on or before the due date set forth for payment in this regulation, shall add ten percent to the total amount due as a cost for collection as prescribed in RCW 15.65.440.

[Statutory Authority: Chapter 15.65 RCW. 92-09-068, 16-532-110, filed 4/14/92, effective 5/15/92; Regulation 1, filed 10/16/64.]

AMENDATORY SECTION (Amending Order 5077, filed 8/23/95, effective 9/23/95 WAC 16-532-120 Labeling. (1) Each lot of hops must be identified by the crop year produced, grower number and lot designation, and variety stenciled on each bale.

(a) A three-digit grower number will be assigned by the Washington hop commodity board (commission) prior to the annual harvest.

(b) The first marking will consist of the last digit of the crop year, the letter "G" and a hyphen, followed by the three-digit grower number and lot designation (example: 8G-000-01).

(c) The first marking shall be affixed on the head or top of the bale and shall be in characters approximately two inches high.

(d) The second marking will consist of the hop variety, utilizing the following abbreviations:

AQ - Aquila

BA - Banner

BG - Brewer's Gold

CA - Cascade

CN - Centennial

CE - Chelan

CH - Chinook

CL - Cluster

CS - Columbus

CR - Crystal

ER - Eroica

EX - Experimental

FU - Fuggle

GA - Galena

GO - Golding

HA - Hallertauer

HE - Hersbrucker

LI - Liberty

MG - Magnum

MH - Mt. Hood

NB - Northern Brewer

NU - Nugget

OL - Olympic

OT - Other

SA - Saaz

SP - Spalter

SY - Symphony

PE - Perle

TE - Tettnanger

UL - Ultra

VA - Vanguard

WI - Willamette

(e) The second marking shall be affixed immediately below the first marking on the head or top of the bale, and shall be in characters approximately two inches high.

(2) In addition to any other brands, labels, stencils or other marks customarily used by hop handlers to identify their own trademarks, labels or firm names, all baled hops shall be branded, labeled, stenciled or marked with one distinctive identifying marking, defined or designated by the hop commodity board (commission), which shall identify the hops as having been grown in the state of Washington.

(a) This mark or identification shall be stenciled in letters at least one inch in height and shall read: "washington," or "grown in washington," as prescribed by the hop commodity board (commission).

(b) This mark or identification shall be affixed in a suitable position on the head or top of the bale, in the area generally used by the federal/state inspectors to stencil their own identification mark and in the same general area where the grower's "G" number and variety identification are applied.

(c) At no time shall the said identification marking appear on the face or sides of the bales, as these areas are considered to be for the use of the dealer or handler for trademarks, shipping markings, bale numbers, firm insignias, etc.

(d) The approved identification marking shall be affixed by the federal/state inspector prior to the drawing of samples for federal/state inspection, and, no hops may be sampled for this purpose unless said markings have been affixed thereto in compliance with the regulations prescribed by the hop commodity board (commission).

(e) Handlers who offer hops for sale in foreign countries where only shipping markings are permitted on the bales or containers, may apply to the hop commodity board (commission) for permission to blot out or remove the identifying marking.

[Statutory Authority: RCW 15.65.050. 95-17-118 (Order 5077), 16-532-120, filed 8/23/95, effective 9/23/95. Statutory Authority: RCW 15.65.280 and WAC 16-532-020 10K [(10)(k)]. 93-09-014, 16-532-120, filed 4/13/93, effective 5/14/93. Statutory Authority: RCW 15.65.380. 88-13-050 (Resolution No. 88-01), 16-532-120, filed 6/10/88; Regulation 2, filed 10/16/64.]

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