Bill Text: OR SB790 | 2011 | Regular Session | Introduced
Bill Title: Relating to agricultural seed; declaring an emergency.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2011-06-30 - In committee upon adjournment. [SB790 Detail]
Download: Oregon-2011-SB790-Introduced.html
76th OREGON LEGISLATIVE ASSEMBLY--2011 Regular Session
NOTE: Matter within { + braces and plus signs + } in an
amended section is new. Matter within { - braces and minus
signs - } is existing law to be omitted. New sections are within
{ + braces and plus signs + } .
LC 3192
Senate Bill 790
Sponsored by Senator ATKINSON
SUMMARY
The following summary is not prepared by the sponsors of the
measure and is not a part of the body thereof subject to
consideration by the Legislative Assembly. It is an editor's
brief statement of the essential features of the measure as
introduced.
Establishes required terms and format for production contracts
between agricultural seed producers and seed dealers.
Establishes remedies for nonperformance. Provides for resolution
of disputes. Establishes responsibility of seed dealer's parent
company.
Applies to written contracts and other agricultural seed
production agreements formed on or after September 1, 2011.
Declares emergency, effective on passage.
A BILL FOR AN ACT
Relating to agricultural seed; creating new provisions; amending
ORS 576.710, 576.725 and 576.727; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. { + As used in sections 1 to 7 of this 2011 Act:
(1) 'Agricultural seed' has the meaning given that term in ORS
633.511.
(2) 'Producer' means a person that grows agricultural seed in
this state for commercial purposes and does not sell agricultural
seed grown by other producers.
(3) 'Protected variety' means an agricultural seed variety that
is subject to the federal Plant Variety Protection Act, 7 U.S.C.
2541(b).
(4) 'Seed bailment contract' means a seed production contract
under which the seed dealer retains title to all seed, seed stock
and plant life grown or used by the producer under the terms of
the contract.
(5) 'Seed dealer' means a person that in the ordinary course of
business contracts to buy agricultural seed grown in this state
by a producer or contracts with a producer for the growing of
agricultural seed in this state.
(6) 'Seed production contract' means a written agreement
between a producer and a seed dealer for the growing of
agricultural seed in this state. 'Seed production contract' does
not include an agreement entered into between a cooperative
organized under ORS chapter 62 and a member of that cooperative.
(7) 'Variety Not Stated Seed' means agricultural seed that is
sold in plastic bags that lack any reference to a variety name
for the seed. + }
SECTION 2. { + (1) The following terms apply to all seed
production contracts:
(a) Except as provided in paragraph (d) of this subsection, if
the price of seed is not expressly stated in the contract as a
specific monetary amount:
(A) The price for seed of a kind described in ORS 62.848 is the
most recent proposed or modified price, if any, approved by the
Director of Agriculture for seed of like kind, variety and
quality to be delivered in the same calendar year; or
(B) The price for seed that is not subject to price
determination under subparagraph (A) of this paragraph is the
market price for seed of like kind, variety and quality at the
time of delivery.
(b) Except as provided in paragraph (d) of this subsection,
payment to the producer is due no later than the earlier of:
(A) Thirty days after delivery of the seed; or
(B) May 1 of the calendar year following the harvesting of the
seed.
(c) Except as expressly provided in the contract, the risk of
loss and the responsibility for the payment of storage fees
transfer from the producer to the seed dealer upon the earlier
of:
(A) The delivery of the seed to the seed dealer; or
(B) The delivery to the seed dealer of test results
establishing that the seed meets quality standards set forth in
the contract.
(d) For seed that does not meet the quality standards set forth
in the contract:
(A) If the contract or a contemporaneous document does not
expressly state a discounted price for the seed, the price is the
market price for seed of that kind and quality.
(B) If the seed dealer does not take delivery and pay the
discounted price of the seed on or before May 1 of the calendar
year following the harvesting of the seed, the producer may send
the seed dealer a written notice that the producer intends to
sell the seed if the seed dealer fails to take delivery and pay
for the seed. If the seed dealer does not take delivery and pay
for the seed on or before 30 days after receiving the written
notice, the seed dealer is deemed to have refused purchase of the
seed and to have authorized the producer to sell the seed in a
commercially reasonable manner as 'Variety Not Stated Seed' and
to apply proceeds from the sale against any amount owed to the
producer by the seed dealer. This paragraph does not authorize
the sale of any seed, seed stock or plant life of a protected
variety grown or used by the producer other than a sale of seed
as 'Variety Not Stated Seed.' The remedy provided in this
paragraph is in addition to any other remedy available to a
producer by law. An authorization for sale arising under this
paragraph is in addition to any other conditional or
unconditional authorization for sale that a seed dealer may grant
to a producer.
(e) Disputes regarding a seed production contract are subject
to mediation and, if mediation fails, to arbitration. Arbitration
shall be nonbinding unless otherwise provided in the contract or
agreed to by the parties.
(2) A seed production contract may not:
(a) Provide for exclusive venue or jurisdiction in another
state;
(b) Provide for the terms of the contract to be interpreted
under the laws of another state;
(c) Waive the application of sections 1 to 7 of this 2011 Act
to the contract; or
(d) Authorize a unilateral material modification of the
contract.
(3) A term in a seed production contract that conflicts with
subsection (1) or (2) of this section is void as a matter of
public policy.
(4) Subject to ORS 72.2010, the terms applicable under
subsections (1) and (2) of this section to a seed production
contract also apply to a nonwritten agreement for the production
of agricultural seed, except an agreement between a cooperative
and a member of that cooperative. + }
SECTION 3. { + (1) A party to a seed production contract may
not, as a condition of performance, require the other party to
agree to a material modification of the contract. A contract
modification obtained in violation of this subsection is
unenforceable.
(2) In any action to recover damages for breach of a seed
production contract, if the court finds that a party to the
contract failed to act in good faith as defined in ORS 71.2010,
the court may award the prevailing party court costs and
reasonable attorney fees. + }
SECTION 4. { + A seed production contract must be in legible
type with 10-point or larger font. The contract language must be
readable at the ninth grade level of reading, as determined using
the Flesch, Fry or Dale-Chall formulas or another standard
readability formula recognized by the Director of Agriculture.
However, the readability requirements do not apply to any
contract language expressly required, recommended or endorsed
under federal or state laws, rules or regulations. The contract
may not use technical terminology to describe goods or services
that are the subject of the contract unless the terminology has a
commonly understood meaning among producers dealing with the type
of goods or services described. The contract sections and
divisions must be appropriately distinguished and labeled. + }
SECTION 5. { + (1) If a seed dealer that is subject to ORS
633.700 is a subsidiary of another company, the State Department
of Agriculture may require as a condition of issuing the seed
dealer a license under ORS 633.700 that the parent company of the
seed dealer guarantee the performance of the seed dealer under
all seed production contracts entered into by the seed dealer.
(2) If the parent company of a seed dealer is a corporation,
partnership or association, the parent company is liable to a
producer for failure in performance by the seed dealer under a
seed production contract.
(3) An agent that enters into a seed production contract on
behalf of a seed dealer is conclusively presumed to have actual
authority to establish the performance obligations of the seed
dealer under the contract. + }
SECTION 6. { + (1) A seed bailment contract does not create a
possessory security interest in goods under ORS chapter 79.
Filing, recording or notice of the contract is not a requirement
for establishing during the term of the seed bailment contract
the validity of the contract or for establishing and confirming
in the seed dealer the title to all seed, seed stock and plant
life grown or used by the producer under the terms of the
contract.
(2) Payments due from a seed dealer to a producer under the
terms of a seed bailment contract are subject to lien under ORS
87.226 and to security interests perfected as provided under ORS
chapter 79. + }
SECTION 7. { + (1) The Director of Agriculture may adopt rules
for the administration and enforcement of sections 1 to 7 of this
2011 Act.
(2) The director may make mediation services available through
the State Department of Agriculture for the resolution of seed
production contract disputes. + }
SECTION 8. ORS 576.710 is amended to read:
576.710. ORS 576.705 does not apply to any processor:
(1) { - Who - } { + That + } purchases from a producer seed
that requires cleaning and germination tests; { - or - }
{ + (2) That arranges for the production of agricultural seed
under a contract that is subject to section 2 of this 2011
Act; + }
{ - (2) - } { + (3) + } Of sugar beets whose contract with
a producer for sale of the crop provides for profit sharing;
{ - or - }
{ - (3) - } { + (4) + } Of fish or seafood products; or
{ - (4) - } { + (5) + } Of meat animals.
SECTION 9. ORS 576.725 is amended to read:
576.725. As used in this section and ORS 576.727:
{ - (1) 'Final payment date' means a date specified in a seed
production or purchase contract by which the wholesale seed
dealer must complete payment to the seed grower or, if a date is
not specified in the contract, May 1 of the year following
production and harvesting of the grass or clover seed. - }
{ - (2) - } { + (1) + } 'Seed delivery' means the date on
which the seed grower delivers grass or clover seed to the
wholesale seed dealer pursuant to a notice from the dealer.
{ - (3) - } { + (2) + } 'Seed { - production or - }
purchase contract' means a written agreement { + for a wholesale
seed dealer to purchase grass or clover seed that has been grown
by a seed grower. 'Seed purchase contract' does not include a
seed production contract as defined in section 1 of this 2011
Act. + } { - that must include: - }
{ - (a) The estimated date for seed delivery; - }
{ - (b) The terms and estimated dates for the wholesale seed
dealer to pay the seed grower; - }
{ - (c) The number of acres of grass or clover seed to be
grown; and - }
{ - (d) The species, cultivars and quality standards of the
grass or clover seed to be produced or purchased. - }
SECTION 10. ORS 576.727 is amended to read:
576.727. { + (1) The terms of a seed purchase contract must
include:
(a) The estimated date for seed delivery;
(b) The terms and estimated date for the wholesale seed dealer
to pay the seed grower;
(c) The amount of grass or clover seed to be purchased; and
(d) The species, cultivars and quality standards of the grass
or clover seed to be purchased. + }
{ - (1) - } { + (2) + } A seed { - production or - }
purchase contract must require the wholesale seed dealer to make
payment to the seed grower within 30 days after seed delivery.
{ - Upon written mutual agreement of the seed grower and the
wholesale seed dealer, the grower may extend the period available
for the dealer to make payment. - }
{ - (2) - } { + (3) + } If a licensed wholesale seed dealer
fails to pay a seed grower as required pursuant to subsection
{ - (1) - } { + (2) + } of this section, the grower may notify
the State Department of Agriculture. Upon notification by a
grower, the department shall determine whether payment has been
made in accordance with { + the + } terms of the { + seed
purchase + } contract. If the department determines that payment
has not been made, the department shall notify the wholesale seed
dealer in writing that the dealer has 30 days to pay the seed
grower all delinquent amounts plus interest on each delinquent
amount at the rate of one percent per month simple interest from
the final payment date for that delinquent amount.
{ - (3) - } { + (4) + } A seed { - production or - }
purchase contract may not vary the terms of the remedy provided
by subsection { - (2) - } { + (3) + } of this section. A
wholesale seed dealer may appeal the notice given by the
department under subsection { - (2) - } { + (3) + } of this
section as provided in ORS chapter 183. Subsection { - (2) - }
{ + (3) + } of this section does not prevent a seed grower from
filing a notice of lien against a wholesale seed dealer.
{ - (4) - } { + (5) + } If a wholesale seed dealer fails to
make payment as required by a notice given by the department
under subsection
{ - (2) - } { + (3) + } of this section, the department shall
suspend the license of the dealer until the dealer demonstrates
to the satisfaction of the department that the dealer is current
on all payments due to seed growers.
{ - (5) - } { + (6) + } A wholesale seed dealer
{ - who - } { + that + } fails to make payment as required by
a notice given by the department under subsection { - (2) - }
{ + (3) + } of this section is considered to have authorized
the seed grower to sell any seed from the { + seed purchase + }
contract that is still in the possession of the grower { + . + }
{ - and to use the variety as provided under the federal Plant
Variety Protection Act, 7 U.S.C. 2541(b), subject to a right of
first refusal by the owner of a protected variety. - } This
subsection does not prevent a wholesale seed dealer from giving
consent to the seed grower by other means and does not supersede
the terms of a consent given by other means.
SECTION 11. { + Sections 1 to 7 of this 2011 Act and the
amendments to ORS 576.710 by section 8 of this 2011 Act apply to
seed production contracts and other agreements for the production
of agricultural seed formed on or after September 1, 2011. + }
SECTION 12. { + The amendments to ORS 576.725 and 576.727 by
sections 9 and 10 of this 2011 Act apply to grass and clover seed
purchase contracts formed on or after September 1, 2011. + }
SECTION 13. { + This 2011 Act being necessary for the
immediate preservation of the public peace, health and safety, an
emergency is declared to exist, and this 2011 Act takes effect on
its passage. + }
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