SF 310 (LSB 1719SV (2) 85)

SENATE FILE 310

BY  COMMITTEE ON AGRICULTURE

(SUCCESSOR TO SSB 1083)

A BILL FOR

An Act relating to the corn promotion board by providing for its governance, providing for an assessed checkoff on corn, and including effective date provisions.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA:

    Section 1.  Section 185C.1, Code 2013, is amended by adding the following new subsection:
   NEW SUBSECTION.  4A.  “Director” means a district elected director or a board elected director as provided in section 185C.6.
    Sec. 2.  Section 185C.1, subsection 5, Code 2013, is amended to read as follows:
   5.  “District” means an official crop reporting district formed by the United States department of agriculture
 
for use on January 1, 2013, and set out in the annual farm census published
 
in that year by the Iowa department of agriculture and land stewardship.
    Sec. 3.  Section 185C.3, Code 2013, is amended to read as follows:
   185C.3  Establishment of corn promotion board.
   If a majority of the producers voting in the referendum election approve the passage of the promotional order, an Iowa corn promotion board shall be established. The board shall consist of one director elected from each district in the state, except that a district producing more than an average of one hundred million bushels of corn in the three previous marketing years is entitled to two directors.
    Sec. 4.  Section 185C.6, Code 2013, is amended by striking the section and inserting in lieu thereof the following:
   185C.6  Number and election of directors.
   The Iowa corn promotion board established pursuant to section 185C.3 shall be composed of directors elected as provided in this chapter. The directors shall include all of the following:
   1.  Nine district elected directors.  Each such director shall be elected from a district as provided in section 185C.5, this section, and sections 185C.7 and 185C.8. A candidate receiving the highest number of votes in each district shall be elected to represent that district.
   2.  Three board elected directors.  Each such director shall be elected by the board. The candidate receiving the highest number of votes by the board shall be elected to represent the state on at-large basis.
    Sec. 5.  Section 185C.7, Code 2013, is amended to read as follows:
   185C.7  Terms of directors.
   1.  Director terms
 
A director’s term of office shall be for three years and no. A district elected director of the board shall
 
not serve for more than three complete consecutive terms.

A board elected director shall not serve for more than one complete term of office. A district elected director who is elected as board elected director shall not serve more than a total of four terms of office, regardless of whether any of the terms of office are complete or consecutive.
   2.  If the board is reconstituted pursuant to section 185C.8, the terms of the directors shall be controlled by this section. However, the initial terms of the reconstituted board shall be staggered. To the extent practicable, one-third of the elected directors shall serve an initial term of one year, one-third of the elected directors shall serve an initial term of two years, and one-third of the elected directors shall serve an initial term of three years. The
 
initial terms
 
of board elected directors shall be determined by board members
 
directors drawing lots. The board elected under this paragraph shall not contain two directors from the same district serving the same term.
    Sec. 6.  Section 185C.8, Code 2013, is amended to read as follows:
   185C.8  Elections
 
Administration of elections for directors.
   1.  The
 
Iowa corn promotion board shall administer elections for
 
district elected directors of the board with the assistance of the secretary. Prior to the expiration of a director’s term of office, the board shall appoint a nominating committee for the district represented by that director. The nominating committee shall consist of five producers who are residents of the district from which a director must be elected. The nominating committee shall nominate two resident producers as candidates for each director position for which an election is to be held. Additional candidates may be nominated by a written petition of twenty-five producers. Procedures governing the time and place of filing shall be adopted and publicized by the board.
   Following recommencement of the promotional order, or termination of the promotional order’s suspension as provided in section 185C.24, the secretary shall order the reconstitution of the board. An election of
 
district elected directors shall be held within thirty days from the date of the order. The secretary shall call for, provide for notice of, conduct, and certify the results of the election in a manner consistent with section 185C.5 through 185C.7. Directors shall serve terms as provided in section 185C.7. Rules or procedures adopted by the board and in effect at the date of suspension shall continue in effect upon reconstitution of the board. The Iowa corn growers association may nominate two resident producers as candidates for each director position. Additional candidates may be nominated by a written petition of at least twenty-five producers.
   2.  The Iowa corn promotion board shall administer elections for board elected directors. Prior to the expiration of a board elected director’s term of office, the board may appoint a nominating committee. In order to be eligible for nomination and election, a candidate must have previously served on the board as an elected director. An officer of the board shall certify the results of the election.
    Sec. 7.  Section 185C.10, subsection 3, Code 2013, is amended by striking the subsection.
    Sec. 8.  Section 185C.14, subsection 3, Code 2013, is amended to read as follows:
   3.  The board shall meet at least once every three months
 
times each year, and at such other times as deemed necessary by the board.
    Sec. 9.  Section 185C.21, subsection 2, Code 2013, is amended to read as follows:
   2.  Upon request of the board, the secretary shall call a special referendum for producers to vote on whether to authorize an increase in the state assessment above one-quarter of one cent per bushel, notwithstanding subsection 1. The special referendum shall be conducted as provided in this chapter for referendum elections. However, the special referendum shall not affect the existence or length of the promotional order in effect. If a majority of the producers voting in the special referendum approve the increase, the board may increase the assessment to the amount approved in the special referendum. However, a state assessment shall not exceed one cent
 
five cents per bushel of corn marketed in this state.
    Sec. 10.  Section 185C.27, Code 2013, is amended to read as follows:
   185C.27  Refund of assessment.
   A producer who has sold corn and had a state assessment deducted from the sale price, by application in writing to the board, may secure a refund in the amount deducted. The refund shall be payable only when the application shall have been made to the board within sixty days after the deduction. Application forms shall be given by the board to each first purchaser when requested and the first purchaser shall make the applications available to any producer. Each application for refund by a producer shall have attached to the application proof of the assessment deducted. The proof of assessment may be in the form of a duplicate or certified copy of the purchase invoice by the first purchaser. The board shall have thirty
 
business days from the date the application for refund is received to remit the refund to the producer. The board may provide for refunds of a federal assessment as provided by federal law. Unless inconsistent with federal law, refunds shall be made under section 185C.26.
    Sec. 11.  IMPLEMENTATION.  The Iowa corn promotion board established pursuant to section 185C.3 shall implement this Act.
   1.  During the implementation period all of the following shall apply:
   a.  The board shall provide for staggered terms of directors in the same manner as required for the initial terms of office of a reconstituted board pursuant to section 185C.7. However, the board is not required to draw lots as otherwise provided in that section.
   b.  The board is not required to fill a vacancy for an unexpired term as required in section 185C.9.
   c.  The board may reduce the number of years of a director’s term in order to comply with this section.
   2.  The board shall complete implementation of this Act not later than July 1, 2014.
    Sec. 12.  EFFECTIVE UPON ENACTMENT.  This Act, being deemed of immediate importance, takes effect upon enactment.
EXPLANATION
   GENERAL. This bill amends Code chapter 185C which provides for an assessment on the sale of each bushel of corn, a self-imposed tax or “checkoff”, imposed on producers and collected by first purchasers for remission to the Iowa corn promotion board (board) for purposes of promoting the marketing of corn and corn products and to provide for related education and research programs and a financial assistance program (Code sections 185C.11, 185C.11A, and 185C.21). The maximum rate of assessment is one cent per bushel (Code section 185C.21). A producer may claim a refund, and the board has 30 calendar days in order to satisfy that claim (Code section 185C.27).
   The board of directors are each elected for staggered three-year terms (Code section 185C.7). The districts are based on the official crop reporting districts established by the United States department of agriculture (Code section 185C.1). Currently, there are nine districts. Each district producing more than an average of 100,000,000 bushels of corn in the prior marketing year is entitled to elect two directors (Code section 185C.3). A director cannot serve for more than three complete consecutive terms (Code section 185C.7). The board must meet once every three months (Code section 185C.14).
   Currently, 17 directors serve on the board. In addition, there are four ex officio, nonvoting members, including the secretary of agriculture, the dean of the college of agriculture and life sciences of Iowa state university of science and technology, the director of the economic development authority, and two representatives of first purchaser organizations (Code section 185C.10).
   BILL —— ORGANIZATION OF DISTRICTS. The bill provides that the nine districts are to be organized based on the crop reporting districts formed by the United States department of agriculture for use on January 1, 2013.
   BILL —— CHANGE IN BOARD GOVERNANCE. The bill provides that 12 directors are to be elected to the board. Each of nine districts are to be represented by one director. In addition three directors are to be elected by the board to serve at large. A board elected director must have served as a district elected director. A board director so elected cannot serve more than a total of four terms in office regardless of whether any of the terms are complete or consecutive.
   The bill removes the director of the economic development authority as an ex officio member.
   BILL —— MEETING TIMES. The bill provides that the board must meet at least three times a year rather than every three months.
   BILL —— ASSESSMENTS. The bill increases the maximum per bushel assessment rate from 1 cent to 5 cents. Any increase in the current assessment rate would have to still be accomplished by a special referendum of producers. The bill provides that the board now has 30 business rather than calendar days in order to satisfy a producer’s request for a refund.
   BILL —— IMPLEMENTATION. The board is responsible for implementing the provisions of the bill, including by providing for staggered terms of its directors notwithstanding any applicable procedures in the Code chapter to the contrary. The board must complete its implementation by July 1, 2014.
   BILL —— EFFECTIVE DATE. The bill takes effect upon enactment.