00RS SB385


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SB 385 (BR 2398) - E. Harris

     AN ACT relating to tobacco.
     Create several new sections of KRS Chapter 248 to establish a system of regulating tobacco purchase contracts outside of the Tobacco Price Support System of quotas; declare that the purpose of the act is to protect tobacco farms by upholding the Tobacco Price Support System and that if tobacco contracts undermine this system, they are in violation of public policy; define various terms, including handler, producer, and standard minimum contracts; create a tobacco contracting commission and set out membership of that commission; require tobacco handlers to notify the commission of their intent to contract for tobacco; require commission to develop standard minimum contracts with all handlers that want to purchase tobacco by contract; give the commission the authority to set minimum prices and standards for the purchase of tobacco directly from producers; require handlers to offer the producers the standard minimum contract to all producers they seek to buy from; allow additional terms in contracts as long as the terms are not inconsistent with the standard minimum contract; require handlers to negotiate in good faith, however if no agreement is reached on a standard minimum contract with the commission, subject the dispute to arbitration; prohibit handlers from purchasing tobacco in the state without a standard minimum contract, except at public auction; require handlers to negotiate in good faith with producers or associations of producers, subject to the same requirements of consistency with the standard minimum contracts and arbitration if no agreement is reached; require all contracts that deviate from the standard minimum contract to be filed with the Attorney General's office and with the county court clerk where the contracted tobacco is grown; require negotiations between handlers and the commission to commence as soon as possible after the handers notify the commission of their intent to contract for the purchase of tobacco; after January 15 of each year subject the dispute to binding arbitration; set the rules of the arbitration and the composition of the arbitration panel; require the arbitration to be completed by March 1 of each year and make it final and binding upon all parties; require judicial action to review the arbitration decision to be initiated by March 7 and stipulate that the only basis for reversal of an arbitration decision is gross abuse of discretion; require appeal to be filed in Franklin Circuit Court and the Court of Appeals or Supreme Court with expedited consideration given because of the demands of the tobacco growing season; grant the Governor the power to promulgate emergency administrative regulations to set the terms of the standard minimum contracts if the arbitration has not resulted in an agreement by March 1; make the following unlawful: coercion of producers to join or not join associations or to enter into or cancel contracts with handlers, discrimination against producers, to paying money to producers to join or not join associations, making false statements about producers or handlers, purchasing or selling tobacco unless in accordance with the terms of the standard minimum contracts or at public auction; allow civil action for preventive relief upon knowledge or belief of unlawful contracts; require Governor and Attorney General to bring civil action to stop unlawful contracts; allow any person injured by unlawful contracts to bring actions against the parties; require the Circuit Courts to have jurisdiction over these suits.


     SFA (1, E. Harris) - Amend provisions of the bill to provide a non-mandatory approach to establishing model contracts to be encouraged to be used by the tobacco handlers for the next two years; amends the definitional section to clarify the meaning of small producer; requires the commission to have at least 3 members who are small producers and to have equal representation from all areas of the state; prohibits handlers from discriminating in contracting for tobacco purchases against any producers based on the amount of tobacco that the producer grows; requires all contracts to be equally distributed among all sizes of producers based on their grower quota; requires that producers have the right to have any proposed contract reviewed outside the business premises of a handler; requires that the contracts shall be written in plain English and gives the producer three days to cancel the contract after he has signed it; requires a study of contract growing of tobacco and the proper role of the state to be done by the Tobacco Task Force; specifies that the Task Force will hold at least 4 meetings on the issue, hear from a wide variety of groups about the issue, and report back to the LRC and the Interim Joint Committee on Agriculture and Natural Resources by September 15, 2001; allows Section 7, regarding the Tobacco Task Force study, to become effective on the normal effective date of July 15, 2000; delays the effective date of the remainder of the bill until October 1, 2000, to allow the commission to set up for the 2001 growing season.

     Mar 3-introduced in Senate
     Mar 6-to Appropriations and Revenue (S)
     Mar 9-reassigned to Agriculture and Natural Resources (S)
     Mar 23-reported favorably, 1st reading, to Calendar; floor amendment (1) filed
     Mar 24-2nd reading, to Rules

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