DME S.B. 1814 75(R)BILL ANALYSIS AGRICULTURE & LIVESTOCK C.S.S.B. 1814 By: Duncan (Junell/Finnell/Seaman/Walker) 5-21-97 Committee Report (Substituted) BACKGROUND The 73rd Legislature created the Official Cotton Growers' Boll Weevil Eradication program. The constitutionality of that program was challenged on several grounds by growers from the Rio Grande Valley and High Plains zones. The court found the statute unconstitutional on the grounds that the state's delegation of authority to a private entity was too broad and inappropriate. S.B. 1814 addresses the court's eight-part test regarding the appropriateness of such delegations primarily by prescribing a heightened role for the Texas Department of Agriculture in the operation of the program. This bill also addresses problems with the operation of the program. Opportunities for grower input are provided through interim advisory groups consisting of at least one grower from each county in an eradication zone, which would report directly to the Commissioner of Agriculture. The program is being updated to reflect other concerns. As a result of climatic conditions last winter and the the effect of the court ruling on the implementation of the program, the Texas Agricultural Extension Service is predicting 1.5 to 3 times more boll weevils to emerge this season than last season. Boll weevils damage cotton crops and pose a significant threat to the welfare of a number of regions in Texas which depend largely on cotton. In an effort to improve the existing official cotton growers' boll weevil eradication program, this bill would include the pink bollworm along with the boll weevil; give additional authority to the Commissioner of Agriculture in managing eradication programs; create new and expanded statutory zones for eradication; change the basis of assessment of penalties on growers who fail to pay certain assessments; and amend provisions regarding the composition of the board of directors of the official cotton growers' boll weevil eradication foundation. PURPOSE S.B. 1814 amends the current provisions regarding boll weevil eradication programs to include pink bollworm eradication along with boll weevil eradication, gives additional authority to the commissioner of agriculture in managing eradication programs, creates new and expanded statutory zones for eradication, changes the basis of assessment of penalties on growers who fail to pay certain assessments; and amends provisions regarding the composition of the board of directors of the official cotton growers' boll weevil eradication foundation. RULEMAKING AUTHORITY It is the Committee's opinion that this bill expressly grants additional rulemaking authority to the commissioner of agriculture in SECTION 1.04 (Section 74.1021(a), (b), (c), (d), (e), and (f), Agriculture Code), SECTION 1.05 (Section 74.1042(a), Agriculture Code), SECTION 1.09 (Section 74.108(b), Agriculture Code), SECTION 1.11 (Section 74.1095(a), Agriculture Code), SECTION 1.22 (Section 74.125(a), Agriculture Code), SECTION 1.24 (Section 74.130(a), Agriculture Code), and SECTION 1.26(c). SECTION 1.13 (Section 74.112(g), Agriculture Code) and SECTION 1.19 (Section 74.120(c), Agriculture Code) do not expressly grant additional rulemaking authority, but the existing rulemaking authority is transferred to a new entity, the commissioner. SECTION 1.15 (Section 74.114(c), Agriculture Code) expands the commissioner's rulemaking authority. SECTION BY SECTION ANALYSIS ARTICLE 1 SECTION 1.01. Amends Section 74.101, Agriculture Code, to state that the boll weevil and the pink bollworm are public nuisances and menaces to the cotton industry and their eradication is a public necessity; provides cotton-growing areas will be divided into zones to best utilize integrated pest management programs; outlines the need for a quasi-governmental entity that represents cotton growers and is under the supervision and control of the commissioner to manage an eradication and suppression program; describes the urgent public necessity to validate and ratify the assessments, agreements, and obligations, of the Texas Boll Weevil Eradication Foundation, Inc. related to certain statutory zones. Sets forth the intent of the legislature that the program utilize the best available integrated pest management techniques. Deletes language regarding the previous purpose and necessity of the program. SECTION 1.02. Amends Chapter 74D, Agriculture Code, by adding Section 74.1011, as follows: Sec. 74.1011. DESIGNATION OF ENTITY TO CARRY OUT BOLL WEEVIL ERADICATION. Requires the Texas Boll Weevil Eradication Foundation, Inc., (foundation), to be the recognized as the entity to plan, carry out, and operate eradication and diapause programs under the supervision of the Texas Department of Agriculture. Sets forth provisions regarding termination of the foundation's designation as the entity recognized to carry out boll weevil eradication and the designation of a successor agent to the foundation. Specifies successor agent is responsible for obligations and liabilities of the former designated entity. SECTION 1.03. Amends Section 74.102, Agriculture Code, to redefine "board," "cotton grower," "eradication," "eradication zone," and "foundation", and defines "pink bollworm." Deletes Subdivisions (9) and (14) regarding the "High Plains Boll Weevil Suppression Program Area" and "St. Lawrence Cotton Growers Boll Weevil Control Zone," and deletes Subdivision (15) regarding the pink bollworm eradication zone. SECTION 1.04. Amends Chapter 74D, Agriculture Code, by adding Section 74.1021, as follows: Sec. 74.1021. STATUTORY ZONES. Sets forth provisions regarding the area and counties composing the Northern High Plains Eradication Zone, the Rolling Plains Central Eradication Zone, the St. Lawrence Eradication Zone, the South Texas Winter Garden Eradication Zone, the Southern High Plains-Caprock Eradication Zone, and the Southern Rolling Plains Eradication Zone. Sets forth that other areas may be added to these zones if approved by referendum. Outlines that Austin, Brazoria, Colorado, Fort Bend, Jackson, Matagorda and Wharton Counties will remain a part of the South Texas Winter Garden Zone only for repayment of existing debt and may be included for other purposes if approved by referendum and the commissioner. Authorizes the commissioner to apportion debt existing on April 30, 1997, to counties removed from the South Texas Winter Garden Eradication Zone. SECTION 1.05. Amends Chapter 74D, Agriculture Code, by adding Sections 74.1041 and 74.1042, as follows: Sec. 74.1041. INTERIM ADVISORY GROUPS. Authorizes the commissioner to designate an interim advisory group for each statutory zone or geographic region of the state that is to be considered by the commissioner for inclusion in an eradication zone. Sets forth provisions regarding advisory groups and gathering input from cotton growers. Sec. 74.1042. CREATION OF NONSTATUTORY ERADICATION ZONES. Authorizes the commissioner, by rule, to designate an area of the state as a proposed eradication zone under certain conditions. Authorizes the commissioner to hold a public hearing and sets forth provisions regarding the holding of such a hearing. Requires the commissioner, after adoption of a rule under Subsection (a), to conduct a referendum under Section 74.105. SECTION 1.06. Amends Sections 74.105(a), (d), (e), and (f), Agriculture Code, to require the commissioner, rather than an organization certified under Section 74.104 of this code or the foundation, to conduct an establishment referendum. Provides that if a referendum to establish an eradication zone fails, the concurrent election of a board member from the proposed eradication zone under Section 74.106 of this code has no effect. Requires the commissioner to appoint a representative to the board from the area. Authorizes the foundation to request the commissioner to call additional referenda in a proposed eradication zone in which a referendum has failed. Specifies establishment referendums can only be held once a year. Requires the eligible voters, after the passage of any referendum, to be allowed by subsequent referenda to vote on whether to continue their assessments. SECTION 1.07. Amends Section 74.106, Agriculture Code, by amending Subsections (a), (c), and (d), and adding Subsection (h), as follows: (a) Sets forth provisions regarding the representation of each eradication zone on the board of directors of the official cotton growers' boll weevil eradication foundation (board). (c) Sets forth the requirements for eligibility for a candidate and member of the board. (d) Sets forth an additional requirement for a cotton grower to serve on the board. (h) Requires a representative of the commissioner to swear in each board member into office as required for elected officers of the state. SECTION 1.08. Amends Section 74.107, Agriculture Code, to require the board to include members elected from each statutory eradication zone established and validated by referendum, members elected from each nonstatutory zone established by referendum, members appointed by the commissioner from other cotton growing areas of the state, and members appointed by the commissioner under Subsection (b). Requires the commissioner to appoint an initial 15-member board. Prohibits, except as provided by Subsection (b), the term of each board position from exceeding four years. Lists five non-cotton grower members who must be appointed to the board. Authorizes the commissioner, rather than the board with the commissioner's approval, to change the number of board positions or the eradication zone representation on the board to accommodate changes in the number of eradication zones. Requires a vacancy on the board to be filled by appointment by the commissioner for the unexpired term. Authorizes the commissioner, upon 30 days' notice and opportunity for hearing, to replace any unelected board member of the foundation. Deletes language regarding the High Plains and St. Lawrence Zones. SECTION 1.09. Amends Sections 74.108, Agriculture Code, as follows: Sec. 74.108. POWERS OF BOARD AND COMMISSIONER. Deletes certain authorizations of the board. Authorizes the board to borrow money, with the approval of the commissioner. Authorizes the commissioner, rather than the board, by rule, to add an area to an eradication zone or transfer an area or county from one statutory zone to another under certain conditions. Requires the board to adopt a procurement policy outlining purchasing procedures, subject to approval by the commissioner. Deletes language regarding initiating the program in new areas and the High Plains Boll Weevil Suppression Program Area. SECTION 1.10. Amends Section 74.109, Agriculture Code, by amending Subsections (a), (d), (e), (g), and (h), and adding Subsections (i) and (j), to require the board to make available to the state auditor for inspection at an annual independent audit all books, records of account, and minutes of proceedings maintained by the foundation. Provides that the financial transactions of the foundation are subject to audit by the state auditor in accordance with Chapter 321, Government Code. Requires the auditor to include individual zone information in the foundation audit. Requires this audit to be made available to the public. Provides that the foundation and the board are state agencies for certain purposes only, including indemnification under Chapter 104, Civil Practice and Remedies Code. Requires that the bank or depository used for foundation funds be approved by the commissioner rather than the board. Requires the board to collect data to be filed with the commissioner on the type and quantity of pesticides used in accordance with this subchapter. Provides that the foundation is subject to certain requirements. Prohibits a board member from voting on any matter in which the member has a direct pecuniary interest. Provides that a board member is subject to the same restrictions as a local public official under Chapter 171, Local Government Code. SECTION 1.11 Amends Subchapter D, Chapter 74, Agriculture Code, by adding Section 74.1095 as follows: Section 74.1095. ADMINISTRATIVE REVIEW. Requires the commissioner to establish rules regarding administrative review procedures for claims resolution. Outlines claims procedures. Requires the commissioner to provide a written statement regarding reasons and the legal basis for any resulting changes. Outlines that the commissioner's formal order is subject to judicial review. Specifies this section is not a waiver of the state's immunity from liability. SECTION 1.12. Amends Section 74.110, Agriculture Code, as follows: Sec. 74.110. LIABILITY OF FOUNDATION MEMBERS, OFFICERS, AND EMPLOYEES AND APPLICATORS. Sets forth the liability of the foundation's members, directors, officers, and employees. Sets forth provisions regarding an applicator's liability. Defines "applicator." Prohibits anything in this section from being construed to mean that an applicator or other person cannot be held responsible for violations of state and federal pesticide and herbicide laws and regulations adopted thereunder. SECTION 1.13. Amends Sections 74.112(f), (g), (h), and (i), Agriculture Code, to require the commissioner to conduct a recall referendum if 30 percent or more of the cotton growers eligible to vote within a zone petition him to do so. Requires the commissioner to give notice of the referendum and conduct the referendum within a certain deadline. Outlines that an establishing or discontinuing referendum can only be held every two years. Provides that approval of the proposition is by the same vote as required in a referendum under Section 74.114(g). Provides that if the proposition is approved, the eradication program is abolished and the eradication zone ceases to exist on payment of all debts of the eradication zone. SECTION 1.14. Amends Section 74.113, Agriculture Code, to require the commissioner, rather than the foundation, to propose, rather than determine, the assessment needed in each eradication zone to ensure the stability of the cotton industry by eradicating the public nuisance caused by the boll weevil and the pink bollworm. Requires the commissioner to make certain propositions in a referendum. Authorizes the foundation, with the commissioner's approval, to make an assessment in an eradication zone at a level less than the assessment approved by the referendum. Requires the commissioner to conduct an assessment referendum under the procedures provided by Section 74.114 of this code. Prohibits an assessment levied on cotton growers in an eradication zone from being used to pay another zone's bank loans or debts. Sets forth provisions regarding the assessment and the amount of the assessment. Requires the commissioner to give notice of and hold a public hearing within the eradication zone regarding the proposed assessment referendum. Sets forth certain requirements for the commissioner before the referendum. Requires the commissioner, on a zone-by-zone basis, to set the date on which assessments are due and payable. Requires the commissioner, each year, to review and approve the foundation's operating budget. Requires the foundation to prepare and mail billing statements to each cotton grower subject to the assessment that state the amount due and the due date. Requires the assessments to be remitted to the foundation. SECTION 1.15. Amends Sections 74.114(a), (c), (d), (f), (h), and (i), Agriculture Code, to require the commissioner, rather than the foundation, to conduct a referendum or board election authorized under this subchapter. Requires the commissioner to hold a referendum in the zone on the continuation of the eradication program every four years at the same time as the election of a board member from the zone. Provides the continuation referendum must be approved by a majority of those voting in the referendum. Requires the commissioner to adopt rules for voting in board elections and referenda to establish or continue eradication zones. Deletes language regarding the adoption of rules by the board for voting in other referenda and board elections. Sets forth requirements regarding rules adopted under this subsection. Sets forth additional provisions regarding a referendum or board election, including ballot determination by the commissioner. Specifies that if a continuation referendum fails, another referendum may not be held for one year. Authorizes, rather than requires, the commissioner to hold a public hearing regarding the proposed eradication program, including information regarding proposed regulations. SECTION 1.16. Amends Section 74.115, Agriculture Code, to set forth requirements regarding the amount of penalties for not paying assessments. Deletes existing Subsection (b) regarding a cotton grower who fails to pay all assessments and penalties. Authorizes the department to place and perfect an assessment lien on cotton produced and harvested that year from certain acreage. SECTION 1.17. Amends Section 74.116, Agriculture Code, by amending Subsections (d) and (f), deleting Subsection (e), and adding Subsection (g), to authorize the commissioner to establish a payment plan for a cotton grower applying for an exemption under this section. Deletes language regarding the foundation's authority to qualify exemptions. Authorizes the commissioner to reduce or waive assessment penalties. SECTION 1.18. Amends Section 74.117, Agriculture Code, to require the department to publish in a newspaper of general publication notice of the intent to enter the cotton growers' fields or premises to carry out the purposes of this subchapter, including treatment, monitoring, or inspection. Requires the foundation to post notice of intent to enter fields or premises in each county's courthouse. Requires the foundation to attempt to notify cotton growers before chemical treatment. Deletes language regarding destroying cotton or other host plants. SECTION 1.19. Amends Sections 74.120(b), (c), and (d), Agriculture Code, to set forth provisions regarding the adoption of rules by which the foundation develops its procedures and methods of treatment. Authorizes the commissioner, rather than the foundation and the department, to adopt other reasonable rules necessary to carry out the purposes of this subchapter and Subchapters A and B of this chapter. Deletes text regarding the adoption of rules by the foundation under this section. Authorizes, rather than requires, an advisory committee to be established to assist the commissioner in the development of rules adopted under this section. SECTION 1.20. Amends Section 74.121, Agriculture Code, to allow the foundation to provide an incentive for early and timely reporting. SECTION 1.21. Amends Section 74.124, Agriculture Code, to require commissioner approval for certain foundation programs. Provides that agreements under Subsection (a) (4)-(5) must be approved in certain referendums by the same margin as required in a retention referendum. SECTION 1.22. Amends Section 74.125, Agriculture Code, to make nonsubstantive and conforming changes. SECTION 1.23. Amends Section 74.126(c), Agriculture Code, to make conforming changes. SECTION 1.24. Amends Chapter 74D, Agriculture Code, by adding Sections 74.128, 74.129 and 74.130, as follows: Sec. 74.128. ANNUAL REPORT. Requires the board to issue to the commissioner and the appropriate oversight committee in the house of representatives an annual report detailing its efforts to carry out the purposes of this subchapter. Sec. 74.129. EXEMPTION FROM LAWSUITS, LIABILITY, TAXATION AND LEGAL PROCESS. Outlines that the Legislature recognizes the foundation as a quasi-governmental entity immune from lawsuits and liability with exceptions. Sets forth provisions regarding the exemption of payments, contributions and funds received or held by the foundation from state and local taxes, levies, and certain execution with exceptions. Clarifies that a lender may attempt to collect on any debt existing before or after this legislation. Sec. 74.130. USE OF BIO-INTENSIVE CONTROLS. Requires the commissioner to adopt rules allowing the use of biological, botanical, or other non-synthetic control methods. Outlines the commissioner's required considerations. Specifies grower's are responsible for any additional cost of bio-intensive control in addition to assessments. SECTION 1.25. (a) Provides that all agreements made and obligations incurred by the Texas Boll Weevil Eradication Foundation, Inc., before the effective date of this Act are validated, ratified, and confirmed. Provides that the foundation's members, directors, officers, employees, and agents are not individually liable for, or in connection with, any agreement or obligation validated under this section. (b) Provides that except for instances of gross negligence, individual criminal actions, or acts of dishonesty, the foundation's members, directors, officers, and employees, are not individually liable to a cotton grower or other person for errors in judgment, mistakes, or other acts or omissions made or occurring before the effective date of this Act under the authority of Chapter 74D, Agriculture Code, as originally enacted or subsequently amended. (c) Provides that this section does not make any obligation validated, ratified, or confirmed under this section a state debt. SECTION 1.26. (a) Provides that assessments approved on certain dates for the Southern Rolling Plains Boll Weevil Eradication Zone, the Central Rolling Plains Boll Weevil Eradication Zone, the South Texas/Winter Garden Boll Weevil Eradication Zone, and all agreements and obligations of the foundation related to the statutory zones made or approved before the effective date of this Act are validated, ratified, and confirmed and shall continue. Provides that assessments already collected in zones not listed are validated, ratified and confirmed. Outlines that certain assessments are not considered as collected by the foundation. (b) Requires the commissioner, by October 20, 1997, to hold a retention referendum and board election in each statutory zone listed in Subsection (a) to determine the continued necessity of an eradication program under Section 74.114, Agriculture Code, as amended by this Act. Provides that the referendum will be determined by a vote of the majority of cotton growers voting in the retention referendum. Specifies that only a diapause program may be carried out until a retention referendum is held. (c) Authorizes the commissioner, in each statutory zone, to solicit public comment through public hearings to determine whether to divide any of the statutory zones as defined in Section 74.1021, Agriculture Code, as added by this Act. Authorizes the commissioner, by rule, to divide a statutory zone and fairly apportion any debt to each portion of the divided zone, after considering public opinion. (d) Requires the commissioner to conduct an eradication referendum in the Southern High Plains-Caprock Eradication Zone before August 1, 1997 in compliance with notice requirements under Subchapter D of this Act. (e) Clarifies that a continuation referendum shall be held every four years with the 4-year period beginning after the effective date of this Act. (f) States that certain rules previously adopted by the commissioner shall continue in effect. SECTION 1.27. Sets forth provisions regarding the adjustment of the composition of the board of directors of the Texas Boll Weevil Eradication Foundation, Inc. If the foundation does not comply, the commissioner may cancel its designation. SECTION 1.28. Requires the commissioner to develop and adopt rules regarding bio-intensive controls before September 1, 1998. Specifies the eradication program will continue as outlined during the time rules are adopted. SECTION 1.29. Repealers: Sections 74.103 and 74.104, Agriculture Code (Certification by Commissioner; Requirements, and Certification; Revocation). ARTICLE 2 SECTION 2.01. Reenacts existing Sections 74.105(b) and (c), Agriculture Code. SECTION 2.02. Reenacts existing Sections 74.106(b), (e), (f), and (g), Agriculture Code. SECTION 2.03. Reenacts existing Sections 74.109(b), (c), and (f), Agriculture Code. SECTION 2.04. Reenacts existing Sections 74.111, Agriculture Code. SECTION 2.05. Reenacts existing Sections 74.112(a)-(e), Agriculture Code. SECTION 2.06. Reenacts existing Sections 74.114(b), (e), (g), and (j), Agriculture Code. SECTION 2.07. Reenacts existing Section 74.118, Agriculture Code. SECTION 2.08. Reenacts existing Section 74.119, Agriculture Code. SECTION 2.09. Reenacts existing Section 74.120(a), Agriculture Code. SECTION 2.10. Reenacts existing Section 74.122, Agriculture Code. SECTION 2.11. Reenacts existing Section 74.123, Agriculture Code. SECTION 2.12. Reenacts existing Section 74.124(b), Agriculture Code. SECTION 2.13. Reenacts existing Section 74.126(a) and (b), Agriculture Code. SECTION 2.14. Reenacts existing Section 74.127, Agriculture Code. ARTICLE 3 SECTION 3.01. Emergency clause. Effective date: upon passage. COMPARISON OF ORIGINAL TO SUBSTITUTE The substitute makes the following changes: - Requires the commissioner to adopt rules to allow growers to use bio-intensive control methods if the grower pays any additional costs associated with the methods. - Clarifies that a continuation referendum shall be held every four years. The four-year period begins after the effective date of this Act and after the program begins operation. - States that certain rules previously adopted by the commissioner will remain in effect. - Provides more specific notification language regarding entering and/or treating a grower's property. - Deletes language subjecting the foundation to the administrative procedure law and replaces it with administrative review procedures for claims resolutions. - Deletes King County from the Rolling Plains Central Eradication Zone because it was inadvertently added. - Clarifies language regarding the removal of Brazoria and Fort Bend Counties from the South Texas Winter Garden Eradication Zone. - Clarifies that the commissioner will apportion debt to the counties that are removed from the South Texas Winter Garden Eradication Zone. - Adds Ector County to the Southern High Plains-Caprock Eradication Zone because it was inadvertently left out. - Clarifies that if a non-statutory zone is formed, the zone will have a representative on the board. - States that a referendum to establish an eradication zone shall occur no more than once a year rather than every 121 days. - States that if a referendum to continue an eradication zone fails, another referendum may not be held again for one year. - Clarifies that the commissioner sets the amount of the penalty based on set criteria. - Allows the commissioner to reduce or waive penalties without recommendation of the foundation. - Makes a conforming change to remove any language pertaining to the foundation as an agent of the department. - Removes Austin County from the South Texas Winter Garden Eradication Zone. - Requires that the entomologist who is appointed to the board is an integrated pest management expert. - Reduces the percentage of eligible voters required to sign a petition to discontinue the program in a zone from 40% to 30%. - Requires the auditor to include zone by zone information in the foundation audit. Requires this audit to be made available to the public. - Makes conforming changes to consistently replace "producer" with "cotton grower." - States that assessments may be "remitted" rather than "paid in cash." - States that a retention election be not later than October 20, 1997, rather than one year from the effective date of this Act. Specifies that only a diapause program may be carried out until that time.