DAR File No. 38287

Agriculture and Food, Marketing and Development

Rule R65-12

Utah Small Grains and Oilseeds Marketing Order

Notice of Proposed Rule

(New Rule)

DAR File No.: 38287
Filed: 02/11/2014 03:46:40 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

The purpose of this rule is to establish a marketing order for small grains and oilseeds producers.

Summary of the rule or change:

Based on discussion by the Utah Conservation Commission and Agriculture Advisory Board, and Agriculture Advisory Board, an exploratory committee of five producers, one grain elevator spokesperson, a professor at Utah State University, and representative from the Utah Department of Agriculture and Food has met three times. Based on those meetings, the Committee and the Commissioner of Agriculture and Food are recommending the establishment of a Utah Small Grains and Oilseed Marketing Order. The marketing order would be funded by an assessment on all wheat, barley, safflower and canola produced in Utah when it is sold. The assessment would be collected by the purchaser at the time of sale and submitted to the marketing board quarterly. The money would be managed by a five-person board of directors made up of producers appointed by the Commissioner and subject to the provisions of the order. The money is to be used to benefit all small grain and oilseed producers in the state by: 1) funding research to discover new varieties of wheat, other small grains, safflower and canola that producer better in Utah's topography and climate; 2) developing new and enhancing existing management practices to increase production; 3) providing education to producers on new varieties and management practices; and 4) developing new market opportunities and/or increase demand for Utah produced grains and oilseed. The establishment of the marketing order will require more than 50% of all registered and certified small grains and oilseed producers who return a ballot to vote in favor as per Section 4-2-2.

State statutory or constitutional authorization for this rule:

• Section 4-2-2

Anticipated cost or savings to:

the state budget:

The cost would be limited to five percent of one state employee.

local governments:

Local government would not be affected because they are not involved in the marketing order.

small businesses:

Small businesses involved in the production of small grains and oil seeds would be subject to the marketing order assessment. Businesses involved in purchasing small grains and oil seeds would be required to collect the assessment and send to the marketing board quarterly.

persons other than small businesses, businesses, or local governmental entities:

Persons involved in the production of small grains and oil seeds are subjected to the assessment which is 3.5 cents per bushel of wheat and 7 cents per hundred weight for barley and oil seeds.

Compliance costs for affected persons:

Persons involved in the production of small grains and oil seeds are subjected to the assessment which is 3.5 cents per bushel of wheat and 7 cents per hundred weight for barley and oil seeds.

Comments by the department head on the fiscal impact the rule may have on businesses:

The benefits to grain and oilseed producers far outweigh any cost that may be incurred by the producers or purchasers and the State of Utah. Yields per acre will generate more profitability and there will be increased economic activity in the State.

LuAnn Adams, Commissioner

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Agriculture and Food
Marketing and Development
350 N REDWOOD RD
SALT LAKE CITY, UT 84116-3034

Direct questions regarding this rule to:

• Kyle Stephens at the above address, by phone at 801-538-7102, by FAX at 801-538-7126, or by Internet E-mail at kylestephens@utah.gov
• Kathleen Mathews at the above address, by phone at 801-538-7103, by FAX at 801-538-7126, or by Internet E-mail at kmathews@utah.gov
• Jed Christenson at the above address, by phone at 801-538-7108, by FAX at 801-538-7126, or by Internet E-mail at jedchristenson@utah.gov

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

03/31/2014

This rule may become effective on:

04/08/2014

Authorized by:

LuAnn Adams, Commissioner

R65. Agriculture and Food, Marketing and Development.

R65-12. Utah Small Grains and Oilseeds Marketing Order.

R65-12-1. Authority.

A. Promulgated under authority of Subsection 4-2-2(1)(e), which authorizes issuing marketing orders to promote orderly market conditions for agricultural products.

B. The Commissioner of Agriculture and Food finds that it is in the public interest to establish a marketing order to improve conditions in the small grains and oilseeds producing industry. The Commissioner finds that the issuance of this marketing order is approved and favored by at least 50 percent of the registered producers and handlers voting on the referendum. It is therefore ordered by the Commissioner that this Order be established to assure an effective and coordinated program to maintain and expand the Utah small grains and oilseed industry's market position, and that the producers shall be subject to the terms and provisions of the Order.

 

R65-12-2. Definition of Terms.

A. "Commissioner" means the Commissioner of the Utah Department of Agriculture and Food.

B. "Person" means any individual, group of individuals, partnership, corporation, association, cooperative, legal representative, or any other entity.

C. "Small grains and oilseeds" means wheat, barley, safflower, canola and any other small grain or oilseed produced or to be produced in Utah.

D. "Producer" means a person owning or leasing cropland consisting of at least 40 acres producing grain and/or oilseed. E. "Registered producers" means producers who meet the minimum threshold of producing at least 40 acres of grain and/or oilseed for registration to vote on the referendum and have indicated that they want to be included in the marketing order voting process by certifying their eligibility to vote in the referendum.

F. "Handler" means an individual or an organization that purchases small grains or oilseed products.

G. "Purchase" means payment made to a producer by an individual or other entity.

 

R65-12-3. Board.

A. The Utah Small Grains and Oilseeds Board is hereby established consisting of five members of the small grains and oilseeds industry (no more than 2 individuals from the same county can serve simultaneously), plus up to two ex-officio non-voting members from Utah State University, the Utah Department of Agriculture and Food or farm organization of the Board's choice. An ex-officio non-voting member can serve as Secretary for the Board.

B. The original members of the Board shall be selected by the Commissioner.

C. Successors to original members shall be appointed by the Commissioner. Two members shall be appointed for a period of three years. Three members shall be appointed for a period of four years. After the first three years, each appointed member shall serve for a period of four years. This rotation shall be in effect for the term of the marketing order. In the event of a vacancy the Commissioner shall appoint a new member from names submitted by the Board.

D. Members of the Board shall only succeed themselves once and not serve on the Board for more than eight consecutive years without a break in term of at least one year.

E. The officers of the Board shall be selected from the five Board members at their first meeting after organization. The officers shall consist of a Chairman and a Vice Chairman, to be elected yearly by the members of the Board. In the event of a vacancy or unfilled office, it shall be filled through an election as soon as practical and shall be for the remainder of the unexpired term.

F. The Board shall exercise the following functions, powers and duties:

1. to receive and expend funds collected for the benefit of the Utah small grains and oilseeds producers,

2. to cooperate with any local, state or national organization engaged in activities similar to those of the Small Grains and Oilseeds Marketing Board,

3. to support, fund and/or conduct educational programs and advertising to promote grains, oilseeds and their products.

4. to support and/or fund research projects to improve the profitability of the Utah small grains and oilseeds industry.

5. to engage in any activity to promote the Utah small grains and oilseeds industry.

G. Attendance of three members at a duly called meeting shall constitute a quorum for the transaction of official business. The Board shall meet at least once annually and more often as deemed necessary by the Board.

H. Each member of the Board is entitled to per diem and expenses in accordance with Sections 63A-3-106 and 63A-3-107.

I. A financial report will be made available annually for members of the industry by the Small Grains and Oilseed Marketing Board.

 

R65-12-4. Provisions of the Order.

A. This order provides for:

1. Grading standards shall not be established below any minimum standards now prescribed by law for the State.

2. Advertising and sales promotion to create new or larger markets for small grains and oilseeds products produced in Utah, provided that any such plan shall be directed towards increasing the sale of such commodity without reference to particular brand or trade name.

3. The labeling, marketing, or branding of grain and oilseed products in conformity with the regulations of the Commissioner or the laws of the State of Utah already in existence and written in the Utah Code.

4. Research projects and experiments for the purpose of improving the general condition of the small grains and oilseeds industry and for the purpose of protecting the health of the people of Utah.

5. The Board may cooperate with any other state or federal agency whose activities may be deemed beneficial to the purpose of this Order.

B. Expenses - Assessments - Collection and Disbursement.

1. Each producer subject to this Order shall pay to the board his or her pro rata share of such expenses as the Commissioner may find necessary to be incurred by the Board for the functioning of said Marketing Order. Each producer shall pay up to 5 cents per bushel of wheat sold (after all dockage has been deducted), and up to 10 cents per hundred weight on barley, safflower and canola sold (after all dockage has been deducted), to the Board quarterly. The discretionary assessment shall be set by majority vote of the Board, and approved by the Commissioner. The initial assessment shall be 3.5 cents per bushel on wheat and 7 cents per hundred weight on barley safflower and canola. This assessment levied in the specified amount shall constitute a personal debt of every person so assessed and shall be due and payable upon sale of the product. The pro rata share of the expenses payable by a cooperative association of producers shall be computed on the basis of the quantity of the product covered by the Order which is distributed, sold, or shipped in commerce by such cooperative association of producers.

2. Only grains and oilseeds produced in Utah shall be assessed. The assessment of each producer shall be deducted from the producer's gross receipt by the purchaser or handler. All proceeds from the deducted portion shall be paid at least quarterly to the Small Grains and Oilseeds Board. Failure of a purchaser or handler to collect and submit the assessment to the Board will result in a penalty to the purchaser or handler of two times the assessment amount. A purchaser or handler who collects the assessment but fails to submit payment to the Board is subject to a penalty equal to three times the assessment amount.

3. The Board shall retain records of the receipt of the assessment. The records shall be audited annually by an auditor approved by the Commissioner. Handlers may be audited on a random basis as deemed necessary by the Board with results included in the annual audit. Copies of the annual audit shall be available to any contributor upon request.

4. The Board is required to reimburse the Commissioner for any funds as are expended by the Commissioner in performing his duties, as provided in this Order. Such reimbursement to include only funds actually expended in connection with this Order.

5. The Board is authorized to incur such expenses as are necessary to carry out its functions subject to the approval of the Commissioner. The Board shall receive and disburse all funds received by it pursuant to this Order. Any funds remaining at the end of any year over and above the necessary expenses of said Board may be carried over to the next year, or divided among all persons from whom such funds were collected. At the discretion of the Board, such amounts may be applied to the necessary expenses of the Board for the continuation of its program during the next succeeding year. If carry over funds exceed $300,000 at the end of any fiscal year, with the Commissioner's approval, the Board may suspend assessments of funds for the ensuing year or longer if deemed appropriate.

6. The Order shall become operational only if it is approved by at least 50 percent of the registered and certified producers and handlers voting in the referendum.

 

R65-12-5. Board - Member's Liability.

No member of the Board, nor any employee of the Board, shall be deemed responsible individually in any way whatsoever to any producer, distributor, handler, processor, or any other person, for errors of judgment, mistakes, or other acts, either of commission or omission of principal, agent, person, or employee, except for his own individual acts of dishonesty or crime. No such person or employee shall be held responsible individually for any act or omission of any other member of the Board. The liability of the members of such Board shall be several and not joint, and no member shall be liable for the default of any other member.

 

R65-12-6. Complaints for Violations - Producer.

Complaints for violations shall be handled by the responsible legal agencies and shall be enforced in the civil courts of the state.

 

R65-12-7. Termination of Order.

The Commissioner may terminate the Marketing Order at such time as he/she may determine there is no longer an industry need for such order. A referendum vote may be called at the request of the producers through a petition of 40 percent of the producers.

 

R65-12-8. Annual Meeting.

The Board shall meet at least annually and as often as the Board deems necessary.

 

KEY: promotions

Date of Enactment or Last Substantive Amendment: 2014

Authorizing, and Implemented or Interpreted Law: 4-2-2(1)(e)