WSR 12-16-105

PROPOSED RULES

DEPARTMENT OF AGRICULTURE


[ Filed August 1, 2012, 9:47 a.m. ]

     Original Notice.

     Preproposal statement of inquiry was filed as WSR 12-12-067.

     Title of Rule and Other Identifying Information: Chapter 16-623 WAC, Commission Merchant Act -- Licensing fees, proof of payment, cargo manifests and registration of acreage commitments. The department is proposing to increase the license fee for commission merchants, dealers, limited dealers, brokers, cash buyers, and agents. These licenses are issued under chapter 20.01 RCW, which authorizes the agricultural investigations program.

     Hearing Location(s): Washington State Department of Agriculture, 21 North First Avenue, Conference Room 238, Yakima, WA 98902, on September 5, 2012, at 1:00 p.m.

     Date of Intended Adoption: September 12, 2012.

     Submit Written Comments to: Henri Gonzales, P.O. Box 42560, Olympia, WA 98504-2560, e-mail hgonzales@agr.wa.gov, fax (360) 902-2094, by September 5, 2012.

     Assistance for Persons with Disabilities: Contact Henri Gonzales by August 29, 2012, TTY (800) 833-6388 or 711.

     Purpose of the Proposal and Its Anticipated Effects, Including Any Changes in Existing Rules: The department is proposing to increase the licensing fees for commission merchants, dealers, limited dealers, brokers, cash buyers, and agents licensed under chapter 20.01 RCW (Commission Merchants Act). During the 2012 legislative session, the Washington state legislature authorized (as required by Initiative 960) the Washington state department of agriculture to increase these licensing fees as necessary to meet the actual costs of conducting business (see 3ESHB 2127, chapter 7, Laws of 2012). The department also proposes to make changes for purposes of formatting and clarity.

     Reasons Supporting Proposal: The agricultural investigations program enforces the Commission Merchants Act; licenses commission merchants, dealers, brokers, agents, and cash buyers; and investigates complaints. The program's revenue is largely derived from license fees. After evaluating the budget and future needs, the agency determined the current fees do not generate enough revenue to sustain program operations and maintain an adequate fund reserve. An increase in licensing fees is necessary to cover the costs of operating the program.

     Statutory Authority for Adoption: RCW 20.01.020 and 20.01.040; chapter 34.05 RCW; and 3ESHB 2127, chapter 7, Laws of 2012.

     Statute Being Implemented: RCW 20.01.020 and 20.01.040.

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

     Name of Proponent: Washington state department of agriculture, governmental.

     Name of Agency Personnel Responsible for Drafting, Implementation and Enforcement: Jerry Buendel, 1111 Washington Street, Olympia, WA 98504-2560, (360) 902-1856.

     No small business economic impact statement has been prepared under chapter 19.85 RCW. The agricultural investigations program has conducted a survey, evaluated the proposed rule amendments, and analyzed the costs of compliance. On the basis of this information, the department has determined that the proposed rule amendments will not impose more than minor costs on the regulated businesses.

     The proposed amendments will not have a more than minor cost impact on the small businesses required to be licensed under chapter 20.01 RCW. The maximum cost to the licensees including those classified as small businesses is $45, below the threshold amount defined as minor costs. Chapter 19.85 RCW, the Regulatory Fairness Act, defines "minor cost" as a cost per business that is less than three-tenths of one percent of annual revenue or income, or one hundred dollars, whichever is greater, or one percent of annual payroll and defines "small business" as a business that employs fifty or fewer employees.

     A cost-benefit analysis is not required under RCW 34.05.328. The Washington state department of agriculture is not a listed agency under RCW 34.05.328 (5)(a)(i).

August 1, 2012

Mary A. Martin Toohey

Assistant Director

OTS-4919.2


AMENDATORY SECTION(Amending WSR 05-09-094, filed 4/20/05, effective 5/21/05)

WAC 16-623-001   ((What is the)) Purpose ((of this chapter?)).   The purpose of this chapter is to implement and clarify selected portions of chapter 20.01 RCW. This chapter addresses four topics.

     (1) Licensing fees and requirements for commission merchants, dealers, brokers, cash buyers or agents.

     (2) Recordkeeping and proof of payment requirements for licensees.

     (3) Cargo manifests and shipping documents that accompany hay and straw during transportation.

     (4) Rules governing the registration of processor acreage commitments made to producers of annual crops.

[Statutory Authority: Chapters 20.01 and 34.05 RCW, 2003 1st sp.s. c 25. 05-09-094, § 16-623-001, filed 4/20/05, effective 5/21/05. Statutory Authority: RCW 20.01.040, [20.01.]125, [20.01.]370, [20.01.]380, [20.01.]410, [20.01.]510. 00-22-071, § 16-623-001, filed 10/30/00, effective 11/30/00.]


AMENDATORY SECTION(Amending WSR 05-09-094, filed 4/20/05, effective 5/21/05)

WAC 16-623-005   ((What)) Definitions ((are important to this chapter?)).   In addition to the definitions listed in RCW 20.01.010, the following definitions are important to understanding this chapter:

     "Department" means the Washington state department of agriculture.

     "Director" means the director of the Washington state department of agriculture or their designee.

[Statutory Authority: Chapters 20.01 and 34.05 RCW, 2003 1st sp.s. c 25. 05-09-094, § 16-623-005, filed 4/20/05, effective 5/21/05.]


AMENDATORY SECTION(Amending WSR 09-20-047, filed 10/1/09, effective 11/1/09)

WAC 16-623-010   ((What)) License requirements ((apply to licenses for commission merchants, dealers, brokers, cash buyers and agents?)).   (1) The following table summarizes the license fee requirements for commission merchants, dealers, brokers, cash buyers, or agents:


License Class License Fee Annual

Expiration Date

 Annual

Renewal Date

 Penalty Amount for Not Renewing Before January 1
Commission merchant $((560.00)) 605.00 December 31 Before January 1 A late renewal penalty of twenty-five percent of the total fees
Dealer $((560.00)) 605.00 December 31 Before January 1 A late renewal penalty of twenty-five percent of the total fees
Limited dealer $((310.00)) 335.00 December 31 Before January 1 A late renewal penalty of twenty-five percent of the total fees
Broker $((375.00)) 405.00 December 31 Before January 1 A late renewal penalty of twenty-five percent of the total fees
Cash buyer $((125.00)) 135.00 December 31 Before January 1 A late renewal penalty of twenty-five percent of the total fees
Agent $((61.00)) 66.00 December 31 Before January 1 A late renewal penalty of twenty-five percent of the total fees
Additional license per class $25.00 December 31 Before January 1 A late renewal penalty of twenty-five percent of the total fees

     (2) A licensee can be licensed in more than one class for an additional fee of twenty-five dollars per class. The principal license must be in the class requiring the greatest fee and all requirements must be met for each class in which a license is being requested.

     (3) All fees and penalties must be paid before the department issues a license.

     (4) Applications for licenses are considered incomplete unless an effective bond or other acceptable form of security is ((also)) filed with the director.

     (5) Licenses may be obtained by contacting the department's ((commission merchants)) agricultural investigations program at 360-902-1854 or e-mail at: commerch@agr.wa.gov. Application forms, bond forms, and forms for securities in lieu of a surety bond are available on the department's web site at: http://www.agr.wa.gov/Inspection/CommissionMerchants/.

[Statutory Authority: RCW 20.01.020, 20.01.040, chapter 34.05 RCW, and 2009 c 564. 09-20-047, § 16-623-010, filed 10/1/09, effective 11/1/09. Statutory Authority: Chapters 20.01 and 34.05 RCW. 07-13-097, § 16-623-010, filed 6/20/07, effective 7/21/07. Statutory Authority: Chapters 20.01 and 34.05 RCW, 2003 1st sp.s. c 25. 05-09-094, § 16-623-010, filed 4/20/05, effective 5/21/05. Statutory Authority: RCW 20.01.040, [20.01.]125, [20.01.]370, [20.01.]380, [20.01.]410, [20.01.]510. 00-22-071, § 16-623-010, filed 10/30/00, effective 11/30/00.]


AMENDATORY SECTION(Amending WSR 05-09-094, filed 4/20/05, effective 5/21/05)

WAC 16-623-015   ((What)) Securities ((are acceptable)) in lieu of a surety bond((?)).   An applicant or licensee may file an assignment of savings or irrevocable letter of credit with the director in lieu of a surety bond. These instruments are subject to the same requirements and provisions as bonds stated in RCW 20.01.210, 20.01.211, and 20.01.212.

[Statutory Authority: Chapters 20.01 and 34.05 RCW, 2003 1st sp.s. c 25. 05-09-094, § 16-623-015, filed 4/20/05, effective 5/21/05.]


AMENDATORY SECTION(Amending WSR 05-09-094, filed 4/20/05, effective 5/21/05)

WAC 16-623-020   ((What are the)) Recordkeeping requirements for commission merchants, dealers, brokers and cash buyers((?)).   Every commission merchant, dealer, broker and cash buyer ((who takes possession of or purchases agricultural products)) must keep accurate records. The recordkeeping requirements for:

     (1) Commission merchants are specified in RCW 20.01.370;

     (2) Dealers and cash buyers are specified in RCW 20.01.380; and

     (3) Brokers are specified in RCW 20.01.400.

[Statutory Authority: Chapters 20.01 and 34.05 RCW, 2003 1st sp.s. c 25. 05-09-094, § 16-623-020, filed 4/20/05, effective 5/21/05. Statutory Authority: RCW 20.01.040, [20.01.]125, [20.01.]370, [20.01.]380, [20.01.]410, [20.01.]510. 00-22-071, § 16-623-020, filed 10/30/00, effective 11/30/00.]


AMENDATORY SECTION(Amending WSR 05-09-094, filed 4/20/05, effective 5/21/05)

WAC 16-623-030   ((Is a)) Cargo manifest ((required)) requirements for transporting hay and straw((?)).   (1) All commission merchants, dealers, their employees or licensed agents must have a copy of the cargo manifest with each load when transporting hay or straw on equipment owned or under their control.

     (2) Any common carrier transporting hay or straw for a commission merchant or dealer may use shipping documents required by either the Washington public utilities and transportation commission or interstate commerce commission instead of the department form described in subsection (5) of this section.

     (3) Any common carriers, commission merchants, dealers, their employees or licensed agents transporting hay or straw may use shipping documents other than the department form described in subsection (5) of this section if they have been reviewed and authorized by the department before their use.

     (4) Unless the exceptions in subsections (2) and (3) of this section apply, the manifest must be on a form prescribed by the director which is available from the department.

     (5) At a minimum, the form requires the following information:

     (a) Purchaser's name and address;

     (b) Hauler's name and address;

     (c) Business or person the products were received from and their address;

     (d) The commodity, unit count, unit price, total price, total weight, tare weight and weight of the commodity;

     (e) Terms of the settlement;

     (f) Date;

     (g) Signature of the licensee or their agent; and

     (h) Signature of the consignor or their authorized representative.

[Statutory Authority: Chapters 20.01 and 34.05 RCW, 2003 1st sp.s. c 25. 05-09-094, § 16-623-030, filed 4/20/05, effective 5/21/05. Statutory Authority: RCW 20.01.040, [20.01.]125, [20.01.]370, [20.01.]380, [20.01.]410, [20.01.]510. 00-22-071, § 16-623-030, filed 10/30/00, effective 11/30/00.]


AMENDATORY SECTION(Amending WSR 05-09-094, filed 4/20/05, effective 5/21/05)

WAC 16-623-040   ((How must)) Reporting a processor's plant capacity ((be reported?)).   (1) According to RCW 20.01.510, a processor must report the daily total capacity in tons, cases or other legal and customary measure for:

     (a) Each crop; and

     (b) All plants that process any Washington agricultural product.

     (2) For each processing plant reported, the report must include the:

     (a) Name;

     (b) Site address;

     (c) Business address; and

     (d) Name of the person(s) who may receive legal service.

[Statutory Authority: Chapters 20.01 and 34.05 RCW, 2003 1st sp.s. c 25. 05-09-094, § 16-623-040, filed 4/20/05, effective 5/21/05. Statutory Authority: RCW 20.01.040, [20.01.]125, [20.01.]370, [20.01.]380, [20.01.]410, [20.01.]510. 00-22-071, § 16-623-040, filed 10/30/00, effective 11/30/00.]


AMENDATORY SECTION(Amending WSR 05-09-094, filed 4/20/05, effective 5/21/05)

WAC 16-623-050   ((What)) Notification requirements ((apply to)) for grower-processor commitments((?)).   (1)(a) Within ten days after a commitment with a processor is made, a grower must notify the director that they have an oral commitment for a specified amount of product.

     (b) The grower's notification to the director must be in writing and sent by certified mail to the Washington State Department of Agriculture, c/o the ((Commission Merchants)) Agricultural Investigations Program, P.O. Box ((42591)) 42560, Olympia, Washington 98504-((2591)) 2560.

     (2) Once the grower's notification is received, the director has five days to notify the processor by certified mail.

     (3) Regardless of whether or not the processor confirms the director's notice, the processor must simultaneously notify the director and grower, by certified mail, within ten days of receipt of the director's notice.

     (4) The processor may accept all, none, or any portion of the acreage and/or tonnage stated in the notice.

     (5) Once the oral commitment is confirmed for all or for a portion of the acreage and/or tonnage, the processor is committed to receive the acreage or tonnage specified.

     (6) If the contract is the processor's standard contract and the terms of the contract, price or other conditions later offered to the grower are unacceptable to the grower, then the agreement is not binding upon the processor.

[Statutory Authority: Chapters 20.01 and 34.05 RCW, 2003 1st sp.s. c 25. 05-09-094, § 16-623-050, filed 4/20/05, effective 5/21/05. Statutory Authority: RCW 20.01.040, [20.01.]125, [20.01.]370, [20.01.]380, [20.01.]410, [20.01.]510. 00-22-071, § 16-623-050, filed 10/30/00, effective 11/30/00.]


AMENDATORY SECTION(Amending WSR 05-09-094, filed 4/20/05, effective 5/21/05)

WAC 16-623-060   ((How are)) Establishing contract volumes ((established?)).   For contracts purchasing the production of a specific number of acres, the:

     (1) Amount contracted for will be based on the crop yield for the comparable area for the most recent five-year average; and

     (2) Crop yield will be determined by using data from the USDA's National Agricultural Statistics Service.

[Statutory Authority: Chapters 20.01 and 34.05 RCW, 2003 1st sp.s. c 25. 05-09-094, § 16-623-060, filed 4/20/05, effective 5/21/05. Statutory Authority: RCW 20.01.040, [20.01.]125, [20.01.]370, [20.01.]380, [20.01.]410, [20.01.]510. 00-22-071, § 16-623-060, filed 10/30/00, effective 11/30/00.]

© Washington State Code Reviser's Office