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H0260...............................................by AGRICULTURAL AFFAIRS
AGRICULTURAL WRITTEN CONTRACTS - Adds to existing law to provide for
agricultural contracts; to provide requirements for certain contractual
language; to provide for inspection and copying of certain contracts; to
provide for confidentiality; to provide for exemptions; to authorize
rulemaking; to provide for violations; and to provide for penalties.
02/15 House intro - 1st rdg - to printing
02/16 Rpt prt - to Agric Aff
|||| LEGISLATURE OF THE STATE OF IDAHO ||||
Fifty-sixth Legislature First Regular Session - 2001
IN THE HOUSE OF REPRESENTATIVES
HOUSE BILL NO. 260
BY AGRICULTURAL AFFAIRS COMMITTEE
1 AN ACT
2 RELATING TO AGRICULTURE; AMENDING TITLE 22, IDAHO CODE, BY THE ADDITION OF A
3 NEW CHAPTER 50, TITLE 22, IDAHO CODE, TO PROVIDE A SHORT TITLE, TO DEFINE
4 TERMS, TO PROVIDE FOR AGRICULTURAL CONTRACTS, TO REQUIRE CERTAIN CONTRAC-
5 TUAL LANGUAGE, TO PROVIDE FOR THE GOVERNING LAW, TO PROVIDE FOR INSPECTION
6 AND COPYING OF CERTAIN CONTRACTS, TO PROVIDE FOR CONFIDENTIALITY, TO PRO-
7 VIDE FOR EXEMPTIONS FROM THE PROVISIONS OF THE CHAPTER, TO AUTHORIZE RULE-
8 MAKING, TO PROVIDE FOR VIOLATIONS AND PENALTIES, TO PROVIDE FOR DISPOSI-
9 TION OF PENALTY ASSESSMENTS AND TO PROVIDE FOR SEVERABILITY.
10 Be It Enacted by the Legislature of the State of Idaho:
11 SECTION 1. That Title 22, Idaho Code, be, and the same is hereby amended
12 by the addition thereto of a NEW CHAPTER, to be known and designated as Chap-
13 ter 50, Title 22, Idaho Code, and to read as follows:
14 CHAPTER 50
15 AGRICULTURAL WRITTEN CONTRACTS ACT
16 22-5001. SHORT TITLE. This chapter shall be known and cited as the
17 "Agricultural Written Contracts Act."
18 22-5002. DEFINITIONS. As used in this chapter:
19 (1) "Agricultural contract" means a written agreement between two (2) or
20 more persons for the purpose of producing an agricultural product stipulating
21 the terms and conditions of performance of the parties and includes, but is
22 not limited to, those contracts commonly referred to as credit sales, bail-
23 ment, deferred payment, delayed or price-later contracts.
24 (2) "Agricultural producer" means any person(s) who produces or causes to
25 be produced on land in this state an agricultural commodity and in a quantity
26 beyond the person's own family use and:
27 (a) Is able to transfer title to another; or
28 (b) Provides management, labor, machinery, facilities, or any other pro-
29 duction input for the production of an agricultural commodity produced on
30 that land.
31 (3) "Agricultural product" means, but is not limited to, a material pro-
32 duced for use in or as food, feed, seed or fiber and includes crops for fiber,
33 food, fuel, oilseeds, seeds, mint oil and other products or byproducts of the
34 farm produced for the same or similar use.
35 (4) "Bailee" means a person who receives personal property from another
36 as a bailment.
37 (5) "Bailment" means a delivery of personal property by one (1) person
38 (the bailor) to another (the bailee) who holds the property for a certain pur-
39 pose under an express or implied-in-fact contract. Unlike a sale or gift of
40 personal property, a bailment involves a change in possession but not in
41 title.
2
1 (6) "Bailor" means a person who delivers personal property to another as
2 a bailment.
3 (7) "Cash sale" means a sale in which cash payment is concurrent with the
4 receipt of the property sold.
5 (8) "Contractor" means a person who, in the ordinary course of business,
6 buys agricultural commodities grown or raised in this state or who contracts
7 with an agricultural producer to grow or raise agricultural commodities in
8 this state.
9 (9) "Department" means the Idaho state department of agriculture.
10 (10) "Director" means the director of the Idaho state department of agri-
11 culture.
12 (11) "Limited liability company" or "domestic limited liability company"
13 means an organization formed under the provisions of chapter 6, title 53,
14 Idaho Code.
15 (12) "Person" means any individual, firm, association, corporation, part-
16 nership, cooperative, joint venture, limited liability company or any other
17 business organization.
18 (13) "Research and development" means an effort, as by a company or busi-
19 ness enterprise, to create or improve products or services, especially by dis-
20 covering new technology or advancing existing technology.
21 (14) "Third party" means one who is not a party to a lawsuit, agreement or
22 other transaction but is somehow involved in the transaction or who may have
23 rights therein.
24 22-5003. AGRICULTURAL CONTRACTS. An agricultural contract entered into,
25 renewed, or amended on or after July 1, 2001, between an agricultural producer
26 and a contractor of agricultural products, shall be consistent with the provi-
27 sions contained in this chapter.
28 22-5004. REQUIRED LANGUAGE. All agricultural contracts shall:
29 (1) Describe or define the type of contract. The description or defini-
30 tion may include, but is not limited to, cash sales, bailment, third party, or
31 a contract involving a limited liability company or other contract types that
32 are consistent with state law. The description or definition shall be the
33 first paragraph or title and appear on the first page of the written contract.
34 (2) Be in legible type, appropriately divided and captioned by its vari-
35 ous sections, and written in clear, understandable language.
36 (a) An agricultural contract may include technical terms to describe the
37 services or property which are the subject of the contract if the terms
38 are customarily used by agricultural producers in the ordinary course of
39 business in connection with the services or property being described.
40 (b) An agricultural contract may utilize particular words, phrases, pro-
41 visions, or forms of agreement specifically required, recommended, or
42 endorsed by a state or federal statute, rule or regulation.
43 (3) Contain the names and addresses of all parties to the contract.
44 (4) Contain the provisions governing cancellation, renewal or amendment
45 of the contract by either party.
46 (5) Describe the duties or obligations of each party listed in the con-
47 tract.
48 (6) Contain any provisions subject to change in the contract.
49 (7) List a payment schedule, payment terms or other considerations.
50 22-5005. GOVERNING LAW. All agricultural contracts shall be governed and
51 interpreted by the laws of the state of Idaho and all disputes arising from
52 agricultural contracts shall be resolved in an Idaho court of competent juris-
3
1 diction.
2 22-5006. INSPECTION AND COPYING OF CONTRACTS. The department may inspect,
3 obtain copies of, and review all agricultural contracts issued by contractors
4 conducting business in this state. The director or his representative shall
5 obtain copies of the contract from the contractor at any reasonable time and
6 review the documents for compliance with this chapter.
7 22-5007. CONFIDENTIALITY. Agricultural contracts and related documents
8 gathered pursuant to section 22-5006, Idaho Code, shall be deemed proprietary
9 information and not subject to disclosure for purposes of chapter 3, title 9,
10 Idaho Code.
11 22-5008. EXEMPTIONS. The following are exempt from the provisions of this
12 chapter:
13 (1) Persons who purchase agricultural commodities for their own use as
14 seed or feed within their own operation;
15 (2) Future contracts which involve the sale or purchase of a standardized
16 quantity of a commodity for future delivery on a regulated commodity exchange;
17 (3) Commodities purchased for research and development purposes.
18 22-5009. RULES. The department may, pursuant to chapter 52, title 67,
19 Idaho Code, make such rules as it may deem necessary for the efficient execu-
20 tion of the provisions of this chapter.
21 22-5010. VIOLATIONS -- PENALTIES. Any contractor who violates any provi-
22 sion of this chapter, or the rules promulgated thereunder, or who shall
23 impede, obstruct, hinder or otherwise prevent or attempt to prevent the direc-
24 tor or his duly authorized representative in the performance of his duty in
25 connection with the provisions of this chapter, shall be issued a warning let-
26 ter for the first offense. If the contractor violates any provision of this
27 chapter or associated rule a second time within a five (5) year period, the
28 contractor may be assessed a civil penalty of not more than ten thousand dol-
29 lars ($10,000). If the contractor violates any provision of this chapter or
30 associated rule a third or subsequent time within a five (5) year period, the
31 contractor may be assessed a civil penalty of not more than twenty-five thou-
32 sand dollars ($25,000).
33 22-5011. PENALTY ASSESSMENTS COLLECTED -- DISPOSITION. All penalty
34 assessments collected under the provisions of this chapter shall be deposited
35 with the state treasurer and be credited to the general fund.
36 22-5012. SEVERABILITY. If any clause, sentence, paragraph, or part of
37 this chapter shall, for any reason, be adjudged by a court of competent juris-
38 diction to be invalid, such judgment shall not affect, impair, or invalidate
39 the remainder thereof, but shall be confined in its operation to the clause,
40 sentence, paragraph, or part thereof directly involved in the controversy in
41 which said judgment shall have been rendered.
STATEMENT OF PURPOSE
RS 11095
This bill is one of several that have been recommended by the
Governor s task force on family farm security. This bill would
require agricultural contracts to be in writing in order to be
protected by certain types of liens and commodity indemnity funds.
FISCAL IMPACT
No fiscal impact.
Contact
Name: Rep. Doug Jones
Phone: 332 1000
STATEMENT OF PURPOSE/FISCAL NOTE H 26