BILL ANALYSIS C.S.S.B. 1196 By: Sims Agriculture 04-18-95 Committee Report (Substituted) BACKGROUND The boll weevil eradication program was created by the 73rd Legislature. Since that time, questions and concerns about the program have arisen: questions about the official cotton growers' boll weevil eradication foundation's power to annex land and borrow money to increase the effectiveness of the program; and concerns about the tax status of the foundation, and whether the program's effectiveness will be maintained. PURPOSE As proposed, C.S.S.B. 1196 amends provisions of the boll weevil eradication program to authorize annexation of contiguous lands and acceptance of grants and loans to increase the effectiveness of the program. Provides that the official cotton growers' boll weevil eradication foundation maintains a tax exempt status as long as it stays a government unit. RULEMAKING AUTHORITY It is the committee's opinion that rulemaking authority is granted to the Department of Agriculture under SECTION 10 (Section 74.120(c), Agriculture Code) of this bill. SECTION BY SECTION ANALYSIS SECTION 1. Amends Sections 74.102(5), (9), and (14), Agriculture Code, to redefine "cotton grower" "High Plains Boll Weevil Suppression Program Area," and "St. Lawrence Cotton Growers Boll Weevil Control Zone." SECTION 2. Amends Section 74.107(a), Agriculture Code, to authorize an area in either the High Plains Boll Weevil Suppression Program Area or the St. Lawrence Cotton Growers Boll Weevil Control Zone to be assigned to another zone as provided by this subchapter. Deletes language prohibiting either zone from being combined with another eradication zone. SECTION 3. Amends Section 74.108, Agriculture Code, as follows: Sec. 74.108. BOARD POWERS. (a) Authorizes the board of directors of the official cotton growers' boll weevil eradication foundation (board) to accept, as necessary, gifts and grants; borrow money as necessary; take other action and exercise authority as necessary to execute any act authorized by this subchapter and Article 1396-1.01 et seq. (Texas Non-Profit Corporation Act), among others. Redesignates existing Subdivision (5) as Subdivision (8). (b) Authorizes the board to add an area to an eradication zone if cotton production begins in the area; the area is adjacent to an eradication zone or an area with similar biological characteristics; and the addition is approved in a referendum held in the area. (c) Authorizes the board to initiate the boll weevil eradication program in area added to an eradication zone and to assess cotton growers in an area added to the eradication zone to ensure the integrity and success of the program. Requires the board to provide notice of intent to initiate eradication and collect assessments through meetings in the affected area not later than 60 days before the date recognized by the board as the average planting date for the area. SECTION 4. Amends Sections 74.109, Agriculture Code, as follows: Sec. 74.109. BOARD DUTIES. (a) and (b) Make no change. (c) Requires the official cotton growers' boll weevil eradication foundation (foundation) to provide fidelity bonds in amounts determined by the board, rather than surety bonds in amounts determined by the commissioner of agriculture (commissioner), for employees who handle foundation funds. (d) Provides that the foundation and the board are state agencies for the purpose of exemption from taxes and indemnification. Deletes language requiring funds collected by the foundation to be held as trust funds. (e) Created from existing Subsection (d). (f) Provides that the foundation is a governmental unit and is entitled to governmental immunity. Requires tort claims against the foundation to be made under Chapter 101, Civil Practice and Remedies Code. (g) and (h) Redesignate existing Subsections (e) and (f). SECTION 5. Amends Section 74.110(a), Agriculture Code, to provide that the foundation, its members, and its directors, among others, are not liable to a cotton grower or other person for certain acts except in instances of negligence, criminal activity, or acts of dishonesty. SECTION 6. Amends Section 74.113(f), Agriculture Code, to authorize an assessment levied on cotton growers in an eradication zone to be applied only to the foundation's operating costs, including payments on debts incurred for any foundation activity, among others. SECTION 7. Amends Section 74.114, Agriculture Code, by amending Subsections (f) and (i) and adding Subsection (j), as follows: (f) Requires the ballots in a referendum or board election to be mailed directly to a central location to be determined by the commissioner and then the board. Requires a cotton grower eligible to vote in a referendum or board election who has not received a ballot from the foundation or another source to be offered the option of requesting a ballot by mail or obtaining one at the office of the county agent of the Texas Agricultural Extension Service (TAES) or a government office distributing ballots in a county in the proposed or established zone in which the referendum or board election is being conducted, rather than voting in person at the TAES office in the county in which the cotton grower resides. Deletes language requiring a county agent to hold the ballots. (i) Requires a public hearing regarding the proposed eradication program, rather than plan, including certain information, to be held by the foundation in several locations within each eradication zone. Prohibits the area for each hearing from including more than six contiguous counties that have cotton production at the time of the hearing. (j) Provides that individual voter information, including an individual's vote in a referendum or board election conducted under this section, is confidential and is not subject to disclosure under Chapter 552, Government Code. SECTION 8. Amends Sections 74.115(b) and (c), Agriculture Code, as follows: (b) Requires a cotton grower who fails to pay all assessments and penalties before the 10th day, rather than 31st, after receiving a delinquency notice to any cotton growing on the acreage subject to the assessment. Requires the Department of Agriculture (department) to follow procedures for the destruction of host plants provided by Subchapter A of this chapter, including procedures for reimbursement by the grower of costs required for destruction. (c) Authorizes the department to place and perfect a lien on cotton produced and harvested that year from the acreage that is subject to the assessment, rather than before the destruction of cotton grown, that is due and unpaid. SECTION 9. Amends Section 74.116(b), Agriculture Code, to prohibit a cotton grower from qualifying for an exemption under this section for a year in which the amount due under this subchapter from the cotton grower's net income subject to federal taxes in the previous year is greater than $15,000. SECTION 10. Amends Section 74.120(c), Agriculture Code, to authorize the department, along with the foundation, to adopt rules necessary to carry out the purposes of this subchapter and Subchapter A. SECTION 11. Amends Section 74.125, Agriculture Code, as follows: Sec. 74.125. ORGANIC PRODUCERS. (a) Created from existing text. Makes a nonsubstantive change. (b) Prohibits the board from treating or requiring treatment of organic cotton fields with chemicals that are not approved for use on certified organic cotton. Authorizes plow-up to be required as an alternative to chemicals. Authorizes the board to provide indemnity for organic producers for reasonable losses that result from a prohibition of production of organic cotton or from any requirement of destruction of organic cotton. Authorizes the board to require mitigation of losses with the production of an alternative crop if time is reasonably available for the production of an alternative crop. SECTION 12. Amends Section 74.126(c), Agriculture Code, to authorize the commissioner or the foundation to request the attorney general or a county or district attorney to file suit if the commissioner or the foundation determines that a violation under this subchapter or of a rule adopted under this subchapter has occurred. SECTION 13. Amends Section 74.127, Agriculture Code, by adding Subsection (c), to provide that if the foundation is abolished or the eradication program discontinued for any reason, assessments approved, levied, or otherwise collectable on the date of abolishment remain valid as necessary to pay financial obligations of the foundation. SECTION 14. Effective date: September 1, 1995. SECTION 15. Emergency clause.