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PAG LIN 1 1 Section 1. Section 196A.1, Code 1995, is amended to read 1 2 as follows: 1 3 196A.1 DEFINITIONS. 1 4 As used in this chapter, unless the context indicates 1 5 otherwise: 1 6 1. "Assessment" means an excise tax on the sale of eggs as 1 7 provided in this chapter. 1 81.2. "Council" means the Iowa egg council. 1 92. "District" means a producer district established by the1 10Iowa poultry association, incorporated. The Iowa poultry1 11association, incorporated shall establish four districts in1 12this state from which egg producers shall be appointed to1 13serve on the Iowa egg council pursuant to this chapter.1 143. "Hatchery operator" means any person who operates a1 15hatchery licensed under chapter 168 and who is actively1 16engaged in the business of hatching or selling chickens for1 17commercial purposes.1 18 3. "Egg by-product" means a product produced in whole or 1 19 in part from eggs or spent fowl. 1 20 4. "Eggs" means eggs produced from a layer-type chicken. 1 21 "Eggs" includes shell eggs or eggs broken for further 1 22 processing, but does not include fertile eggs that are 1 23 incubated, hatched, or used for vaccines. 1 244.5. "Market development" means research and educational 1 25 programs which are directed toward: 1 26 a. Better and more efficient production, marketing, and 1 27 utilization ofpoultry and poultry productseggs or egg by- 1 28 products produced for resale. 1 29 b. Better methods, including, but not limited to, public 1 30 relations and other promotion techniques, for the maintenance 1 31 of present markets and for the development of new or larger 1 32 domestic or foreign markets and for the sale ofpoultry and1 33poultry productseggs or egg by-products. 1 34 c. Prevention, modification, or elimination of trade 1 35 barriers which obstruct the free flow ofpoultry and poultry2 1productseggs or egg by-products to market. 2 25. "Poultry and poultry products" means layer-type chicken2 3hens and eggs, including hatching eggs, and their products.2 4 6. "Processor" means the first purchaser of eggs from a 2 5 producer, or a person who both produces and processes eggs. 2 6 7. "Producer" means any person who owns, or contracts for 2 7 the care of,five hundredthirty thousand or more layer-type 2 8 chickens, the eggs of which are sold in this state through2 9commercial channels, including, but not limited to, eggs for2 10hatching, which have been produced by the producer's own flock2 11 raised in this state. 2 12 8. "Purchaser" means a person who resells eggs purchased 2 13 from a producer or offers for sale a product produced from 2 14suchthe eggs for any purpose. 2 15 9. "Qualified financial institution" means a bank, credit 2 16 union, or savings and loan as defined in section 12C.1. 2 17 Sec. 2. Section 196A.4, Code 1995, is amended to read as 2 18 follows: 2 19 196A.4 ESTABLISHMENT OF IOWA EGG COUNCIL ANDTAX2 20 ASSESSMENT. 2 21 1. The secretary shall call and the department shall 2 22 conduct a referendum upon the department's receipt of a 2 23 petition which is signed by at least twenty producers 2 24 requesting a referendum to determine whether to establish an 2 25 Iowa egg council and to impose an assessment as provided in 2 26 section 196A.15. The referendum shall be conducted within 2 27 sixty days following receipt of the petition. The petitioners 2 28 shall guarantee payment of the cost of the referendum by 2 29 providing evidence of financial security as required by the 2 30 department. 2 31 2. The department shall give notice of the referendum on 2 32 the question whether to establish a council and to impose an 2 33 assessment by publishing the notice for a period of not less 2 34 than five days in at least one newspaper of general 2 35 circulation in the state. The notice shall state the voting 3 1 places, period of time for voting, and other information 3 2 deemed necessary by the department. A referendum shall not be 3 3 commenced until five days after the last date of publication. 3 4 3. Each producer who signs a statement certifying that the 3 5 producer is a bona fide producer shall be entitled to one 3 6 vote. At the close of the referendum, the secretary shall 3 7 count and tabulate the ballots cast. If a majority of voters 3 8 favor establishing an Iowa egg council and imposinga taxan 3 9 assessment,an Iowa egga council shall be established, and 3 10the taxan assessment shall be imposed commencing not more 3 11 than sixty days following the referendum as determined by the 3 12Iowa eggcouncil and shall continue for a period of five years 3 13 unless extended as providedunder this chapterin section 3 14 196A.4A. If a majority of the voters do not favor 3 15 establishingan Iowa eggthe council and imposing thetax3 16 assessment, thetax will not be imposed nor will thecouncil 3 17 shall not be established and an assessment shall not be 3 18 imposed until another referendum is held under this chapter 3 19 and a majority of the votersfavorapprove establishing a 3 20 council and imposing thetaxassessment. If a referendum 3 21 should fail, another referendum shall not be held within one 3 22 hundred eighty days. 3 23Subsequent referendums to extend the imposition of the tax3 24shall be held every five years in the year prior to the3 25expiration of the tax in force; however, upon receipt of a3 26petition signed by at least fifty producers requesting a3 27referendum election to determine whether to terminate the3 28establishment of the Iowa egg council and to terminate the3 29imposition of the excise tax as provided herein, the secretary3 30shall call a referendum to be conducted within sixty days3 31following the receipt of the petition. The petitioners shall3 32guarantee the payment of the costs of such referendum. If the3 33majority of the voters of any subsequent referendum do not3 34favor an extension, an additional referendum may be held when3 35the secretary receives a petition signed by at least fifty4 1producers. However, the subsequent referendum shall not be4 2held within one hundred eighty days.4 3 4. Immediately after passage of the question at the 4 4 referendum, the secretary shall appoint seven members to the 4 5 council in accordance with section 196A.5 based on nominations 4 6 made by the Iowa poultry association. The association shall 4 7 nominate and the secretary shall appoint two members 4 8 representing large producers, two members representing medium 4 9 producers, and three members representing small producers. 4 10 The department, in consultation with the association, shall 4 11 determine initial classifications for small, medium, and large 4 12 producers. The secretary shall complete the appointments 4 13 within thirty days following passage of the question at the 4 14 referendum. 4 15 Sec. 3. NEW SECTION. 196A.4A REFERENDUMS CONDUCTED 4 16 DURING THE TENURE OF THE COUNCIL AND ASSESSMENT. 4 17 1. A referendum shall be conducted as follows: 4 18 a. A referendum to extend the imposition of the assessment 4 19 imposed pursuant to section 196A.4 shall be held every five 4 20 years in the year prior to the expiration of the assessment in 4 21 force. 4 22 b. The secretary shall call, and the department shall 4 23 conduct, a referendum upon the department's receipt of a 4 24 petition which is signed by at least twenty producers 4 25 requesting a referendum to determine whether to terminate the 4 26 council and the imposition of the assessment. The referendum 4 27 shall be conducted within sixty days following receipt of the 4 28 petition. The petitioners shall guarantee payment of the cost 4 29 of the referendum by providing evidence of financial security 4 30 as required by the department. 4 31 2. The following procedures shall apply to a referendum: 4 32 a. The department shall give notice of the referendum on 4 33 the question whether to continue the council and the 4 34 assessment by publishing the notice for a period of not less 4 35 than five days in at least one newspaper of general 5 1 circulation in the state. The notice shall state the voting 5 2 places, period of time for voting, and other information 5 3 deemed necessary by the department. A referendum shall not be 5 4 commenced until five days after the last date of publication. 5 5 b. Upon signing a statement certifying to the secretary 5 6 that a person is a bona fide producer, the person is entitled 5 7 to one vote in each referendum conducted pursuant to this 5 8 section. The department shall conduct the referendum and 5 9 count and tabulate the ballots filed during the referendum 5 10 within thirty days following the close of the referendum. 5 11 (1) If a majority of the total number of producers voting 5 12 in the referendum approves the continuation of the council and 5 13 the assessment as provided in the referendum, the council 5 14 shall remain in existence and the assessment shall be levied 5 15 as provided in this chapter. 5 16 (2) If a majority of the total number of producers voting 5 17 in referendum held pursuant to this section do not approve 5 18 continuing the council and the assessment as provided in the 5 19 referendum, the secretary shall terminate collection of the 5 20 assessment on the first day of the year for which the 5 21 referendum was to continue. The secretary shall terminate the 5 22 activities of the council in an orderly manner as soon as 5 23 practicable after the determination. An additional referendum 5 24 may be held as provided in section 196A.4. However, the 5 25 subsequent referendum shall not be held within one hundred 5 26 eighty days. 5 27 Sec. 4. Section 196A.5, Code 1995, is amended to read as 5 28 follows: 5 29 196A.5 COMPOSITION OF COUNCIL. 5 30 The Iowa egg council established under this chapter shall 5 31 be composed offour eggseven producers, one from each5 32district; two egg processors; and one hatchery operator who5 33shall be appointed pursuant to this chapter. Each council 5 34 member must be a natural person who is a producer or an 5 35 officer, equity owner, or employee of a producer. A producer 6 1 shall not be represented more than once on the council. Two 6 2 persons shall represent large producers, two persons shall 6 3 represent medium producers, and three persons shall represent 6 4 small producers. The council shall adopt rules pursuant to 6 5 chapter 17A establishing classifications for large, medium, 6 6 and small producers. The following persons or their designees 6 7 shall serve as ex officio nonvoting members: 6 8 1. The secretaryor the secretary's representative, the. 6 9 2. The director of the Iowa department of economic 6 10 development, and the. 6 11 3. The chairperson of the poultry science section of the 6 12 department of animal science at Iowa State University of 6 13 science and technologyor the chairperson's representative6 14shall serve as ex officio nonvoting members of the council.6 15The council shall annually elect a chairperson from its6 16membership. 6 17 Sec. 5. NEW SECTION. 196A.5A TERMS AND ADMINISTRATION 6 18 PROCEDURES. 6 19 1. A person shall serve as a member on the council for a 6 20 term of three years. A person may serve as a member on the 6 21 council for more than one term. However, if a person serves 6 22 for two complete consecutive terms, the person must wait at 6 23 least twelve months prior to serving another term. 6 24 2. The council shall elect a chairperson, and other 6 25 officers as needed, from among its voting members who shall 6 26 serve for a one-year term, and may be reelected to serve 6 27 subsequent terms according to procedures adopted by the 6 28 council. 6 29 3. A majority of voting members of the council present 6 30 during a meeting shall constitute a quorum. A majority of the 6 31 members present during a meeting is necessary to carry out the 6 32 duties and exercise the powers of the council as provided in 6 33 this chapter, unless the council requires a greater number. 6 34 4. The council shall meet at least once every three months 6 35 and at other times the council determines are necessary. 7 1 Sec. 6. NEW SECTION. 196A.5B ELECTION AND APPOINTMENT 7 2 PROCEDURES. 7 3 1. The council shall appoint a committee to nominate 7 4 candidates to stand for election to the council. The council 7 5 may require that the committee nominate candidates to be 7 6 appointed by the council to fill a vacancy in a position for 7 7 the unexpired term of a member. The committee shall be 7 8 comprised of five producers, including the chairperson of the 7 9 council who shall serve as the chairperson of the nominating 7 10 committee. The nominating committee shall include at least 7 11 one member of the council whose term is next to expire. The 7 12 committee shall also include at least one producer who is 7 13 classified as a large producer, if a member whose term is to 7 14 expire represents large producers; at least one producer who 7 15 is classified as a medium producer, if a member whose term is 7 16 to expire represents medium producers; and at least one 7 17 producer who is classified as a small producer, if a member 7 18 whose term is to expire represents small producers. 7 19 2. The council shall appoint a producer to fill a member's 7 20 position occurring because of a vacancy on the council. The 7 21 person appointed to fill the vacancy must meet the same 7 22 requirements as a person elected to that position. The person 7 23 shall serve for the remainder of the unexpired term. 7 24 3. A notice of an election for members of the council 7 25 shall be provided by the council by publication in a newspaper 7 26 of general circulation in the state and in any other 7 27 reasonable manner required by the council. The notice shall 7 28 include the period of time for voting, voting places, and any 7 29 other information determined necessary by the council. 7 30 Sec. 7. Section 196A.11, Code 1995, is amended by adding 7 31 the following new subsection: 7 32 NEW SUBSECTION. 2A. Administer elections for members of 7 33 the council and provide for the appointment of persons to fill 7 34 vacancies occurring on the council, as provided in section 7 35 196A.5B. The department may assist the council in 8 1 administering an election, upon request to the secretary by 8 2 the council. 8 3 Sec. 8. Section 196A.12, subsection 4, Code 1995, is 8 4 amended to read as follows: 8 5 4. Enter into arrangements for the collection of thetax8 6on eggsassessment. 8 7 Sec. 9. Section 196A.13, Code 1995, is amended to read as 8 8 follows: 8 9 196A.13 PROHIBITED ACTIONS. 8 10 The council shall not do any of the following: 8 11 1. Become a dues-paying member of anyother firm,8 12association,organizationor corporation, including but not 8 13 limited to a firm, association, or corporation, regardless of 8 14 whether the organization is public or private. However, upon 8 15 approval by the board, the council may become a dues-paying 8 16 member of an organization carrying out a purpose related to 8 17 the increased consumption and utilization of eggs or egg by- 8 18 products. 8 19 2.Furnish, directly or indirectly, anyProvide direct or 8 20 indirect financial support to or for any other person,firm,8 21association, organization or corporation, public or private,8 22 except as provided in subsection 1 or for contracts for 8 23 servicesrendered or to be rendered forrelated to research, 8 24andpromotional,andor public relations programs,andor for 8 25 the administrative expenses of theIowa eggcouncil. 8 26 3. Act, directly or indirectly, in any capacity in 8 27 marketing or making contracts for the marketing of eggs or 8 28poultryegg by-products. 8 29 4. Act, directly or indirectly, in any capacity in selling 8 30 or contracting for the selling ofegg-producing or poultry-8 31producingegg or egg by-product equipment. 8 32 5. Make any contributionout of the fundsofthecouncil 8 33 moneys, either directly or indirectly, to any political party 8 34 or organization or in support ofanya political candidate for 8 35 public office, or make payments to a political candidateor9 1 including but not limited to a member of Congress or theIowa9 2legislaturegeneral assembly for honorariums, speeches, or for 9 3 any other purposes above actual and necessary expenses. 9 4 Sec. 10. Section 196A.14, Code 1995, is amended to read as 9 5 follows: 9 6 196A.14 COMPENSATION. 9 7 Members of the council may receive payment for their actual 9 8 expenses and travel in performing official council functions. 9 9 Payment shall be made from amounts collected from thetax9 10 assessment.NoA member of the council shall not be a 9 11 salaried employee of the council or any organization or agency 9 12 receivingfundsmoneys from the council.The council shall9 13meet at least once every three months, and at other times it9 14deems necessary.9 15 Sec. 11. Section 196A.15, Code 1995, is amended to read as 9 16 follows: 9 17 196A.15TAXASSESSMENT. 9 18 If approved by a majority of voters at a referendum as 9 19 provided in this chapter,a tax to bean assessment amount set 9 20 by the council at not more than five cents for each thirty 9 21 dozen eggssold by a producer willproduced in this state 9 22 shall be imposed on the producer at the time of delivery to a 9 23 purchaser who will deduct thetaxassessment from the price 9 24 paid to the producer at the time of sale. The assessment 9 25 shall not be refundable. The assessment is due to be paid to 9 26 the council within thirty days following each calendar 9 27 quarter, as provided by the council. 9 28 PARAGRAPH DIVIDED. If the producer sells eggs to a 9 29 purchaser outside the state of Iowa, the producer shall deduct 9 30 the tax from the amount received from the sale and shall 9 31 forward the amount deducted to the council within thirty days 9 32 following each calendar quarter. If the producer and 9 33 processor are the same person, then that person shall pay the 9 34taxassessment to the council within thirty days following 9 35 each calendar quarter. 10 1 Sec. 12. Section 196A.16, subsection 5, Code 1995, is 10 2 amended to read as follows: 10 3 5. The rate of withholding and the total amount oftax10 4 assessment withheld. 10 5 Sec. 13. Section 196A.19, unnumbered paragraph 2, Code 10 6 1995, is amended to read as follows: 10 7 Moneys collected, deposited in the fund, and transferred to 10 8 the council as provided in this chapter are subject to audit 10 9 by the auditor of state. The moneys transferred to the 10 10 council, shall be used by theIowa eggcouncil first for the 10 11 payment of collection expenses, second for payment of the 10 12 costs and expenses arising in connection with conducting 10 13 referendums, and third for market development. Moneys 10 14 remaining after a referendum is held when a majority of the 10 15 voters do not favor extending thetaxassessment shall 10 16 continue to be expended in accordance with this chapter until 10 17 exhausted. 10 18 Sec. 14. Section 196A.24, Code 1995, is amended to read as 10 19 follows: 10 20 196A.24 PURCHASERS OUTSIDE IOWA. 10 21 The secretary may enter into arrangements with purchasers 10 22 from outside Iowa for payment of thetaxassessment. 10 23 Sec. 15. Sections 196A.2, 196A.3, 196A.6, 196A.7, 196A.8, 10 24 196A.9, 196A.10, and 196A.18, Code 1995, are repealed. 10 25 Sec. 16. IMPLEMENTATION. The council shall implement this 10 26 Act, which may include providing for the early termination of 10 27 the terms, nomination of candidates, elections, and the 10 28 establishment of staggered terms for members elected after the 10 29 effective date of this Act. The council may provide for 10 30 shorter or longer terms for members first elected after the 10 31 effective date of this Act. However, a term shall not be 10 32 longer than three years. The term of a member elected prior 10 33 to the effective date of this Act shall terminate not later 10 34 than July 1, 1998. Notwithstanding this Act, a member serving 10 35 on the council on the effective date of this Act may be 11 1 reelected for an additional term. However, the member's term 11 2 completed prior to the effective date of this Act shall be 11 3 counted as a full term under this Act. 11 4 Sec. 17. CODE EDITOR. The Code editor is requested to 11 5 consider transferring the provisions of chapter 196A to or 11 6 near chapter 184, and renumbering its sections to enhance 11 7 readability, including sections amended by this Act. 11 8 Sec. 18. EFFECTIVE DATE. This Act, being deemed of 11 9 immediate importance, takes effect upon enactment. 11 10 EXPLANATION 11 11 This bill amends a number of provisions in chapter 196A 11 12 providing for the establishment of the Iowa egg council and 11 13 assessment of an excise tax upon eggs used to support market 11 14 development of eggs or egg by-products, including spent 11 15 poultry and spent poultry products. The bill amends a number 11 16 of definitions. It changes the name of "tax" to "assessment", 11 17 which is consistent with the definition of the tax imposed by 11 18 other commodity organizations. It changes the definition of 11 19 producer subject to the assessment to mean a person who owns 11 20 or controls 30,000 or more layer-type chickens. Currently, 11 21 the term producer means a person who owns or controls 500 or 11 22 more layer-type chickens. It strikes definitions relating to 11 23 districts and hatchery operators. 11 24 Under current law, the council is comprised of four egg 11 25 producers each representing a different district, two egg 11 26 processors, and one hatchery operator. The bill provides 11 27 that the council is composed of seven producers who represent 11 28 large, medium, and small producers. The bill reduces the 11 29 number of producers required to call a referendum to establish 11 30 or terminate a council and assessment from 50 to 20 producers. 11 31 The bill reduces the terms of council members from four to 11 32 three years, and limits the number of consecutive terms that a 11 33 member may serve from three to two terms. 11 34 The bill amends provisions prohibiting the council from 11 35 engaging in certain activities. The bill provides that upon 12 1 board approval the council may become a dues-paying member of 12 2 an organization carrying out a purpose related to the 12 3 increased consumption and utilization of eggs and egg by- 12 4 products. 12 5 The bill provides that an assessment imposed under the 12 6 chapter must be paid to the council within 30 days following 12 7 each calendar quarter, as provided by the council. 12 8 The bill provides that the existing council must implement 12 9 the bill, which may provide for the early termination of 12 10 terms, nominating candidates, conducting new elections, and 12 11 establishing staggered terms for newly elected members. 12 12 The bill repeals a number of sections. With one exception, 12 13 these provisions have been rewritten in other sections of the 12 14 bill. The bill eliminates section 196A.18, which provides 12 15 that a producer who has paid a nonrefundable promotion import 12 16 tax in another state on eggs produced in Iowa may, by 12 17 application to the council, secure a refund. 12 18 Finally, the bill requests that the Code editor consider 12 19 transferring the provisions of chapter 196A to or near chapter 12 20 184, and renumbering its sections to enhance readability. 12 21 This would place the provisions of chapter 196A with chapters 12 22 governing other promotion boards. 12 23 LSB 1618SV 76 12 24 da/jj/8
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