Brief ⁽¹⁾

HB 2674 would privatize the Corn, Grain Sorghum, Soybean, and Wheat Commissions. Each commodity would have its own commission elected by producer members who would serve three-year terms. The new commissions could not have less than seven members and each commission could, by majority vote, appoint two additional members to serve at-large. Members of the current commodity commissions are appointed by the Governor.

The bill would establish an election procedure and provide for the qualifications for members of the commissions. Growers of any of the commodities who are residents of Kansas would become eligible voters upon registering to vote in commission elections and would be required to have grown the crop within the last three years. In order to vote, growers must be of legal voting age. Growers would be defined to mean any natural person, partnership, association, corporation, or other legal entity engaged in the growing of corn, grain sorghum, soybeans, or wheat who owns or who shares in the ownership and risk of one of the crops, whether as landlord or tenant. The bill would provide that for purposes of being an eligible voter, a legal entity, under certain circumstances, would designate a natural person to register to vote for the legal entity. No grower could cast more than one ballot for any commission election.

Commissioners would have to be residents of the state and been producers of the commodity for at least five years prior to election. Any challenge to the election results would be reviewed by a panel of commissioners and, if not resolved, would be reviewed by the Secretary of Agriculture as the final arbitrator. The Dean of the College of Agriculture at Kansas State University and the Secretary of Agriculture would serve as ex-officio members of each of the commissions. The bill would establish a process to transition from the current commodity commissions to the new ones created under the bill. Meetings and records of each of the commissions would be open to the public to the same extent as is required by law by public boards and commissions pursuant to the Open Records Act and the Open Meetings Act. Records would include contracts entered into by any commission.

Commissions would have the power to:

• conduct a campaign of commodity promotion and market development;



• accept grants and donations;



• contract with the Secretary of Agriculture for the collection of assessments and to enter into any other contract as may be necessary or advisable;



• appoint an administrator, who would have the authority to appoint other personnel as needed;



• cooperate or contract with any local, state, or national organization or agency;



• bring any suit or action for the collection of assessments;



• establish an office of administrator at any place in the state (the administrator and any other personnel appointed would not be employees of the state);



• adopt, rescind, modify, and amend necessary and proper orders, resolutions, and rules and regulations;



• approve a budget and establish a reserve with each project including an objective and anticipated results;



• report annually to the respective growers, the Secretary of Agriculture, and to the House and Senate Agriculture Committees; and



• allow each of the commissions to annually set the related mill levy rate at not more than 5 mills for grain sorghum, 5 mills for corn, 20 mills for soybeans, and 10 mills for wheat.

The annual report would include expenditures and the results of an annual audit performed by a certified public accountant. Any commission year end reserve balance exceeding 125 percent of the previous five-year rolling average for annual expenditures is to be included as a part of the report.

The bill would give the Secretary of Agriculture the power to:

• hire clerical and other personnel deemed necessary to carry out the act;



• establish recordkeeping requirements deemed necessary by the commodity commissions;



• inspect and audit any records required to be kept by the act; and



• contract with any of the commissions for the collection of the assessments and to enter into any other contracts necessary to carry out the provisions of the bill.

The assessments on the commodities imposed under the bill would be remitted to the Secretary of Agriculture and deposited by the Secretary in a bank account established in the name of the appropriate commission. Each bank account is to be secured by a pledge of securities in the manner prescribed for state bank accounts as provided in KSA 75-4218. Moneys collected by the national check-off program for soybeans would be paid directly to the Soybean Commission.

The bill would pay the balance of all funds and liabilities associated with the current grain commissions to each of the newly created commissions as appropriate. Funds would be retained in amounts necessary to pay payroll expenses incurred through June 30, 2000. Remaining moneys from those retained would be paid to the appropriate commission. In addition, the bill would transfer the property of the current Wheat Commission to the newly created wheat commission under the bill.

The bill also would establish the Grain Commodities Commission Services Fund in the State Treasury. Moneys received by the Department of Agriculture from the newly created commodity commissions for services provided by the agency would be deposited in the newly created Fund. The bill would provide that all costs and expenses incurred by the Department in providing services to the commodity commissions would be paid for from the Fund. Expenditures from the Fund would be made in accordance with appropriations acts and on vouchers approved by the Secretary of Agriculture.

Effective May 31, 2000, provisions of the bill would provide that notice be given to employees of the Kansas Wheat Commission and the Department of Agriculture 30 days prior to June 30, 2000, that their positions would be abolished.

Other provisions of the bill would amend current sections of law referring to the current commodity commissions to delete references to those commissions.

The effective date of the bill would be upon publication in the Kansas Register. However, most of the provisions except those dealing with notice to the employees of the Wheat Commission and the Department of Agriculture concerning termination, would be effective July 1, 2000.

Background

This bill was introduced at the request of a spokesperson for the Kansas Corn Growers Association and the Kansas Grain Sorghum Grower's Association. At the hearing on the bill, the Secretary of Agriculture explained that her predecessor had convened a working group composed of various members of the commissions and that the agency had worked to develop the legislation.

Other conferees appearing in support of the bill included representatives of the Kansas Soybean Commission, the Kansas Association of Wheat Growers, the Kansas Soybean Association, the Kansas Grain Sorghum Producer's Association, the Kansas Corn Growers Association, the Kansas Grain and Feed Association, and the Kansas Farm Bureau.

Appearing in opposition to the bill before the House Agriculture Committee were representatives of the Kansas Farmers Union.

The Senate Committee on Agriculture amended the bill to:

• clarify the definition of grower and require that legal entities, under certain conditions, could designate a natural person to register to vote for legal entities;



• stipulate that growers need to be of legal voting age in order to vote and that they have grown the crop in the last three years in order to be eligible to vote;



• clarify that no grower could cast more than one ballot for any commission election;



• allow the new commissions to annually establish the mill levy rate at not more than the current statutory maximums;



• prevent the new commissions from changing the mill levy assessments more than once a year;



• allow funds to be retained by the existing commissions in an amount sufficient to pay payroll expenses incurred through June 30, 2000, with any remainder being paid to the appropriate commission;



• establish notice procedure for employees of the Kansas Wheat Commission and the Department of Agriculture whose positions are being abolished effective June 30, 2000;



• make the notice provisions effective May 31, 2000; and



• make the bill effective upon publication in the Kansas Register with the provisions other than those dealing with notice to employees becoming effective on July 1, 2000.

The fiscal note on the bill indicates that passage of the bill would result in a revenue reduction to the State General Fund of $509,787 in FY 2001 and approximately the same amount in each subsequent fiscal year. For expenditures, approximately $8.0 million would be removed from the total state budget in FY 2001 and in subsequent years. This amount includes approximately $4.3 million and 1.3 FTE positions from the grain commodity commissions attached to the Department of Agriculture and $3.7 million and 8.0 FTE positions from the Kansas Wheat Commission.

1. *Supplemental notes are prepared by the Legislative Research Department and do not express legislative intent. The supplemental note and fiscal note for this bill may be accessed on the Internet at http://www.ink.org/public/legislative/bill_search.html