Chapter 356
Oregon Laws 2011
AN ACT
HB 2159
Relating to
seeds; creating new provisions; amending ORS 576.710, 633.511, 633.680 and
633.700; repealing ORS 576.725 and 576.727; and declaring an emergency.
Be It Enacted by the People of the State of Oregon:
SECTION 1. As used in sections 1
to 10 of this 2011 Act:
(1) “Agricultural seed” means grass
seed of a type commonly sold for use in turf lawns or as forage seed.
(2) “Authenticate” has the meaning
given that term in ORS 79.0102.
(3) “Producer” means a person that
grows agricultural seed in this state on a commercial basis for a seed dealer.
(4) “Seed bailment contract” means a
seed production contract under which the seed dealer retains title to all seed,
seed stock and plant life grown or used by the producer under the terms of the
contract.
(5) “Seed dealer” means a person that
in the ordinary course of business contracts to buy agricultural seed grown in
this state by a producer or contracts with a producer for the growing of
agricultural seed in this state.
(6) “Seed delivery” means the date on
which the seed grower delivers grass seed to the seed dealer pursuant to a
notice from the dealer.
(7) “Seed grower” means a person that
grows grass seed in this state on a commercial basis without entering into a
contract with a seed dealer prior to harvesting of the seed.
(8) “Seed production contract” means a
written agreement between a producer and a seed dealer for the growing of
agricultural seed in this state.
(9) “Seed purchase contract” means a
written agreement for a seed dealer to purchase grass seed that has been grown
by a seed grower. “Seed purchase contract” does not include a seed production
contract.
(10) “Variety Not Stated Seed” means
agricultural seed that is sold in unmarked plastic bags or other unmarked
containers without any reference to a variety name for the seed.
SECTION 2. (1) The following terms
apply to seed production contracts:
(a) If the contract does not settle
the price of the agricultural seed, the contract is enforceable and the price
shall be determined as described in ORS 72.3050 (1) to (3).
(b) Except as provided in section 3
(1) or (3) of this 2011 Act, payment to the producer is due no later than the
earliest of the following:
(A) The dates specified in the
contract.
(B) Thirty days after delivery of the
seed.
(C) May 1 of the calendar year
following the harvesting of the seed.
(c) Unless expressly provided
otherwise in a seed production contract that is authenticated by the producer
and seed dealer prior to the producer planting the agricultural seed, the risk
of loss and the responsibility for the payment of storage fees transfer from
the producer to the seed dealer upon the earlier of:
(A) The delivery of the seed to the
seed dealer pursuant to a notice from the seed dealer; or
(B) The delivery to the seed dealer of
test results establishing that the seed meets quality standards set forth in
the contract.
(d) Unless expressly provided
otherwise in a seed production contract that is authenticated by the producer
and seed dealer prior to the producer planting the agricultural seed, the
minimum period for an initial contract is two years. This paragraph does not
establish a minimum period for an extension or renewal that follows an initial
contract period.
(2) It is an implied condition of any
price or payment requirement described in subsection (1) of this section that
the producer is performing, or has completed performance, in accordance with
the seed production contract and has not otherwise breached the contract.
(3) Except as provided in subsection
(5) of this section, a seed production contract described in this section may
contain any additional terms agreed to by the parties.
(4) If a seed production contract is
extended or renewed, for the extension or renewal period the parties may:
(a) Subject to paragraph (b) of this
subsection, continue the terms of the original contract or agree to new or
different contract terms; and
(b) Agree to payment due date terms as
provided under this section or under section 3 (3) of this 2011 Act.
(5) A seed production contract may
not:
(a) Provide for exclusive venue or
jurisdiction in another state;
(b) Provide for the terms of the
contract to be interpreted under the laws of another state;
(c) Waive the application of sections
1 to 10 of this 2011 Act to the contract; or
(d) Authorize a unilateral material
modification of the contract.
(6) Subject to ORS 72.2010,
subsections (1) and (5) of this section also apply to a nonwritten agreement
for the production of agricultural seed.
(7) A term in a seed production
contract that conflicts with subsection (1) or (5) of this section is void as a
matter of public policy.
SECTION 3. (1) A seed production
contract that is authenticated by the producer and seed dealer prior to the
producer planting the agricultural seed may contain payment due date terms that
differ from the payment due date terms described in section 2 (1)(b) of this
2011 Act if the contract:
(a) Provides for the price of the seed
to be determined no later than March 15 of the calendar year following
harvesting of the seed;
(b) Requires the seed dealer to make a
partial payment no later than March 15 of the calendar year following
harvesting of the seed that is at least 40 percent of the full payment amount;
and
(c) States the date by which final
payment for the seed is due.
(2) If a seed production contract that
is authenticated by the producer and seed dealer prior to the producer planting
the agricultural seed does not contain each provision, requirement and
statement described in subsection (1)(a) to (c) of this section,
notwithstanding any contrary payment due date terms stated in the contract, the
payment due date terms of the contract are subject to section 2 (1)(b) of this
2011 Act.
(3) An extension or renewal of any
seed production contract, regardless of when the contract was authenticated,
may contain payment due date terms that differ from the payment due date terms
described in section 2 (1)(b) of this 2011 Act if the extension or renewal
contains the provision, requirement and statement described in subsection
(1)(a) to (c) of this section. If an extension or renewal of a seed production
contract does not contain each provision, requirement and statement described
in subsection (1)(a) to (c) of this section, notwithstanding any contrary
payment due date terms stated in the extension or renewal, the payment due date
terms for the extension or renewal are subject to section 2 (1)(b) of this 2011
Act.
(4) It is an implied condition of any
payment requirement created as provided under this section that the producer is
performing, or has completed performance, in accordance with the seed
production contract and has not otherwise breached the contract.
SECTION 4. (1) A seed bailment
contract or seed purchase contract does not create a possessory security
interest in goods under ORS chapter 79. For a seed bailment contract, filing,
recording or notice of the contract is not a requirement for establishing,
during the term of the contract, the validity of the contract or for
establishing and confirming in the seed dealer the title to all seed, seed
stock and plant life grown or used by the producer under the terms of the
contract.
(2) Payments due from a seed dealer to
a producer under the terms of a seed bailment contract, or due to a seed grower
under the terms of a seed purchase contract, are subject to lien under ORS
87.226 and to security interests perfected as provided under ORS chapter 79.
SECTION 5. (1) The terms of a seed
purchase contract must include:
(a) The estimated date for seed
delivery;
(b) The terms and estimated date for
the seed dealer to pay the seed grower;
(c) The amount of grass seed to be
purchased; and
(d) The species, cultivars and quality
standards of the grass seed to be purchased.
(2) If the seed purchase contract does
not settle the price of the grass seed, the contract is enforceable and price
shall be determined as described in ORS 72.3050 (1) to (3). A seed purchase
contract must require the seed dealer to make payment to the seed grower within
30 days after seed delivery. However, upon written mutual agreement of the seed
grower and the seed dealer, the grower may extend the period available for the
dealer to make payment.
SECTION 6. (1) A party to a seed
production contract or seed purchase contract may not, as a condition of
performance, require the other party to agree to a material modification of the
contract. A contract modification obtained in violation of this subsection is
unenforceable.
(2) In any action to recover damages
for breach of a seed production contract or seed purchase contract, if the
court finds that a party to the contract failed to act in good faith as defined
in ORS 71.2010, the court may award the prevailing party court costs and
reasonable attorney fees.
SECTION 7. (1) If testing as
provided under a seed production contract establishes that agricultural seed
does not meet the quality standards set forth in the contract, the producer may
at any time send the test results to the seed dealer and inquire whether the
seed dealer intends to purchase the seed. If, within 30 days after the seed
dealer receives the test results and inquiry from the producer, the seed dealer
delivers a response informing the producer that the seed dealer intends to
purchase the seed, the response is an accord that forms a seed purchase
contract for the seed purchased under this subsection. Except as provided in
this subsection regarding price, the parties may establish the terms of the
seed purchase contract as provided under section 5 of this 2011 Act. The price
of the seed that is subject to the seed purchase contract shall be:
(a) Any price stated in the seed
production contract for seed not meeting quality standards;
(b) If not determined by the seed
production contract, any price agreed to by the parties; or
(c) If not determined by the seed
production contract or by agreement, the market price for seed of the same kind
and quality as the produced seed. However, a seed price established by the use of
market price may not exceed any price established in the seed production
contract for seed that meets quality standards.
(2) An accord that creates a seed
purchase contract under subsection (1) of this section does not affect the
terms of a seed production contract for any seed that was not described in the
test results and inquiry sent by the producer.
(3) A producer may send test results
and make an inquiry under subsection (1) of this section in any manner that
documents seed dealer receipt of the test results and inquiry. A seed dealer
may send a response under subsection (1) of this section to a producer in any
manner that documents producer receipt of the response.
(4) If, within 30 days after the seed
dealer receives the test results and inquiry from the producer, the seed dealer
has not delivered a response informing the producer that the seed dealer
intends to purchase the seed, the seed dealer is deemed to have refused
purchase of the seed and to have authorized the producer to sell the seed in a
commercially reasonable manner as “Variety Not Stated Seed.” This subsection
does not authorize the sale of any seed, seed stock or plant life of a
protected variety grown or used by the producer other than a sale of seed as “Variety
Not Stated Seed.” The remedy provided under this subsection is in addition to
any other remedy available to a producer by law. An authorization for sale
arising under this subsection is in addition to any other conditional or
unconditional authorization for sale that a seed dealer may grant to a
producer.
SECTION 8. (1) If a seed dealer
fails to pay a producer for agricultural seed when payment is due under a seed
production contract or fails to pay a seed grower for grass seed when payment
is due under a seed purchase contract, the producer or seed grower may notify
the State Department of Agriculture. Upon notification by a producer or seed
grower, the department shall determine whether payment has been made when due.
If the department determines that the seed dealer has not made a payment that
is due under a seed production contract or seed purchase contract, the
department shall notify the seed dealer in writing that the dealer has 30 days
to pay the producer or seed grower all delinquent amounts plus interest on each
delinquent amount at the rate of one percent per month simple interest from the
final payment date for that delinquent amount.
(2) A seed production contract or seed
purchase contract may not vary the terms of the remedy provided by this
section. A seed dealer may appeal the notice given by the department under this
section as provided in ORS chapter 183. This section does not prevent a
producer or seed grower from filing a notice of lien against a seed dealer.
(3) If a seed dealer fails to make
payment as required by a notice given by the department under this section, the
department shall suspend any seed dealer license issued to the dealer until the
dealer demonstrates to the satisfaction of the department that the dealer is
current on all payments due to all producers and seed growers. An order
suspending a license under this subsection is subject to ORS chapter 183.
However, the department may not suspend a seed dealer license under this
section using the procedure described in ORS 183.430 (2).
(4) A seed dealer that fails to make
payment on a seed production contract or seed purchase contract as required by
a notice given by the department under this section is considered to have
authorized the producer or seed grower to sell in a commercially reasonable
manner any seed from the contract that is still in the possession of the
producer or seed grower. This subsection does not prevent a seed dealer from
giving consent to the producer or seed grower by other means and does not
supersede the terms of a consent given by other means.
(5) The department may charge a
producer or seed grower a fee, not to exceed $50, for determining whether
payment has been made in accordance with the terms of a seed production
contract or seed purchase contract. The department may charge a producer or
seed grower a fee, not to exceed $200, for notifying a seed dealer in writing
regarding the deadline for payment of delinquent amounts plus interest.
SECTION 9. (1) As used in this
section:
(a) “Officer” means any of the
following individuals:
(A) A president, vice president,
secretary, treasurer or director of a corporation.
(B) A general partner in a limited
partnership.
(C) A manager in a manager-managed
limited liability company.
(D) A member of a member-managed
limited liability company.
(E) A trustee.
(F) An individual that is an officer
as defined by the State Department of Agriculture by rule. A definition of “officer”
adopted by department rule may include individuals not listed in this paragraph
who may exercise substantial control over a business.
(b) “Owner” means:
(A) A sole proprietor of, partner in
or holder of a controlling interest in an applicant; or
(B) Any person that is an owner as
defined by the department by rule.
(2) The State Department of Agriculture
may adopt rules to require, as a condition of issuing a seed dealer license
under ORS 633.700, that each seed dealer provide the department financial
assurance for the performance by the seed dealer under any seed production
contract or seed purchase contract entered into by the seed dealer.
(3) The department may refuse to issue
a seed dealer license to an applicant if the applicant, any owner or officer of
the applicant or any individual exercising substantial control over the seed
industry activities of the applicant:
(a) Is a seed dealer for which the
license has been suspended under section 8 of this 2011 Act;
(b) Is or was an owner or officer of a
seed dealer at the time of an event that resulted in the license of the seed
dealer being suspended under section 8 of this 2011 Act; or
(c) Was an individual who exercised
substantial control over the seed industry activities of a seed dealer at the
time of an event that resulted in the license of the seed dealer being
suspended under section 8 of this 2011 Act.
(4) An agent that enters into a seed
production contract on behalf of a seed dealer is conclusively presumed to have
actual authority to establish the performance obligations of the seed dealer
under the contract.
SECTION 10. (1) The Director of
Agriculture may adopt rules for the administration and enforcement of sections
1 to 10 of this 2011 Act.
(2) The director may make mediation
services available through the State Department of Agriculture for the
resolution of seed production contract disputes and seed purchase contract
disputes.
SECTION 11. ORS 576.710 is amended to
read:
576.710. ORS 576.705 does not apply to
any processor:
(1) [Who] That purchases from a producer seed that requires
cleaning and germination tests; [or]
(2) That arranges for the
production of agricultural seed under a contract that is subject to section 2
or 3 of this 2011 Act;
[(2)]
(3) Of sugar beets whose contract with a producer for sale of the crop
provides for profit sharing; [or]
[(3)]
(4) Of fish or seafood products; or
[(4)]
(5) Of meat animals.
SECTION 12. Sections 1 to 10 of
this 2011 Act and the amendments to ORS 576.710 by section 11 of this 2011 Act
apply to seed production contracts, seed purchase contracts and other
agreements for the production of agricultural seed or grass seed formed on or
after August 1, 2011.
SECTION 13. If the State
Department of Agriculture adopts a rule described in section 9 (2) of this 2011
Act, the department shall report to the next regular session of the Legislative
Assembly following the rule adoption regarding the contents of the rule and the
matters considered by the department in developing the rule.
SECTION 14. ORS 633.511 is amended to
read:
633.511. As used in ORS 633.511 to
633.750:
(1) “Agricultural seed” means fiber,
forage and grass crop seed and any other kind of seed or bulblet commonly
recognized in this state as agricultural seed or as lawn or turf seed, and
mixtures of any of such seeds, as may be determined by the Director of
Agriculture.
(2) “Certified,” as applied to
bulblets, tubers or horticultural plants or to agricultural, cereal grain,
flower or vegetable seed, means inspected and labeled by and in accordance with
the standards and rules and regulations adopted by the dean under ORS 633.620
or in accordance with similar standards established by some similar regularly
constituted authority in another state or country.
(3) “Conditioner” means any person who
cleans, blends, bags or stores seed.
(4) “Dean” means the dean of the
College of Agricultural Sciences of Oregon State University, or agent.
(5) “Director” means the Director of
Agriculture, or agent.
(6) “Flower seed” means seeds of
herbaceous plants grown for their blooms, ornamental foliage or other
ornamental parts, and commonly known and sold in this state under the name of
flower or wildflower seeds.
(7) “Inert matter” includes stones,
dirt, leafage, stems, badly broken seed and masses of spores.
(8) “Labeling” includes all labels and
other printed, written or graphic representations in any form on the container
of any seeds or accompanying or pertaining to any seeds, whether in bulk or in
containers, and includes representations on invoices.
(9) “Mixed seed” and “mixture” mean
any lot of seed that contains in excess of five percent by weight of each of
two or more kinds or varieties of agricultural, flower or vegetable seed.
(10) “Other crop seed” means that part
of any lot or sample of seed that consists of agricultural, cereal grain,
flower or vegetable seeds other than those named on the label.
(11) “Percentage of germination” means
the percentage of pure seed of a lot or sample that produces satisfactory
sprouts before the close of a standard germination test as prescribed pursuant
to ORS 633.580.
(12) “Percentage of hard seed” means
the percentage of pure seed of any lot or sample that remains in its normal
hard condition at the close of a standard germination test as prescribed
pursuant to ORS 633.580.
(13) “Prohibited noxious weed seed”
means the seed of weeds that when established are highly destructive,
competitive and difficult to control by ordinary good cultural practice.
(14) “Pure seed” means the
agricultural, flower or vegetable seed of which there is the largest percentage
by weight in any unmixed lot or sample and, in the case of mixtures, includes
any agricultural, flower or vegetable seed consisting of not less than five
percent by weight of the kind or kinds of seed under consideration, as
distinguished from other crop seed, weed seed and inert matter.
(15) “Restricted noxious weed seed”
means the seed of such weeds as are very objectionable in fields, lawns and
gardens but can be controlled by good cultural practice.
(16) “Retailer” means any person who
sells, offers or holds for sale, agricultural, flower or vegetable seed to
ultimate consumers or users for planting purposes.
(17) “Vegetable seed” means the seed
of those crops usually grown in Oregon in gardens or on truck farms or for
canning and freezing purposes and generally known and sold under the name of
vegetable seed.
(18) “Weed seed” means any seed or
bulblets other than agricultural, cereal grain, flower or vegetable.
(19) “Wholesaler” means any person who
sells, offers or holds for sale or contracts to obtain the production of,
agricultural, flower or vegetable seed to retailers, distributors, brokers or
other wholesalers for resale.
SECTION 15. ORS 633.680 is amended to
read:
633.680. (1) The Director of
Agriculture shall establish standards of germination for vegetable seed, and
shall make reasonable rules and regulations necessary to effectuate the purpose
of ORS 633.511 to 633.750 and 633.996, covering:
(a) Licensing, suspension,
reinstatement and revocation of licenses, which rules and regulations shall
conform to the law governing suspension, refusal or revocation of licenses by
the State Department of Agriculture.
(b) Regulatory and official sampling.
(c) Labeling of seeds, including such
additional information as may be required in order to maintain uniformity with
the laws and regulations of the federal government or of other states.
(d) Quarantining, which rules and
regulations shall conform to the law for establishment of quarantines by the
State Department of Agriculture.
(e) Seizure, treatment and disposition
of seeds from outside this state.
(f) Seizure of seeds.
(g) Changes in the list of prohibited
noxious weed seeds and in the list of restricted noxious weed seeds.
(h) Tolerances for differences between
the contents of a container of agricultural, flower or vegetable seed
and the label thereon.
(i) The types of records and the
procedures for handling forms and records that must be kept by seed dealers and
seed conditioners.
(j) The identity of varieties of
agricultural seed required by ORS 633.520.
(k) The variations in time provided
for in ORS 633.651.
(L) The use and labeling of
hermetically sealed or other types of containers or conveyances involving
seeds.
(m) The type of analysis tests that
must be conducted to develop information used in preparing seed labels or tags.
(2) The director may adopt rules
establishing standards for forms used in reporting analysis of seed.
(3) The director may establish fees
and charges for official sampling, applied for by the owner, at an amount
sufficient to cover the cost. The director may also establish reasonable
charges covering issuance of permits, and the treatment and disposition of
seeds seized and held under quarantine. However, in any case where the service
involved is in such location or under such circumstances that the usual fees or
charges are insufficient to cover the expense, the director may make additional
charges to avoid loss to this state.
SECTION 16. ORS 633.700 is amended to
read:
633.700. (1) A person may not sell,
offer or expose for sale in this state, or contract to have produced in this
state for commercial purposes, any agricultural, flower or vegetable
seeds unless the person holds an unsuspended license issued by the State
Department of Agriculture. [A person
selling, offering or exposing for sale only flower seeds at retail must hold an
unsuspended license issued by the department. However, any person selling seeds
of the person’s own production exclusively, and persons selling only flower or
vegetable seeds at retail, in packages weighing not in excess of one-half
pound, as prepared for such trade by other seed companies, if the seed company
preparing such packaged seed for sale, has a license in force for the sale of
such seed in this state, is not required to secure such license.] However,
a person is not required to obtain a license if the person is selling only
seeds produced by the person or if the person is selling flower or vegetable
seeds at retail in packages weighing not more than one-half pound that were
prepared for retail sale by a seed company licensed under this section. For
the purposes of this section, persons operating more than one branch, plant or
warehouse where seeds are sold, offered or exposed for sale shall secure a
separate license for each such branch, plant or warehouse.
(2) Any person desiring to sell, offer
or expose for sale in this state any agricultural, flower or vegetable seeds,
for planting purposes, except as provided in this section, shall make
application to the Director of Agriculture for a license for this purpose.
The application shall be signed by the applicant or the authorized agent of the
applicant and shall be in a form approved by the director. Upon presentation of
such signed application for a license and the tendering of the license fee
established by the department pursuant to subsection (3) of this section, the
department shall issue the license to the applicant. The license shall expire
on June 30 next following the date of issuance or on such date as may be
specified by department rule.
(3) The department shall establish
annual license fees, not to exceed $40 for a retailer’s license and not to
exceed $400 for a wholesaler’s license. Only one license shall be required for
one person’s operation at one location.
SECTION 17. The amendments to ORS
633.511 and 633.700 by sections 14 and 16 of this 2011 Act apply to contracts
entered into on or after the effective date of this 2011 Act.
SECTION 18. ORS 576.725 and
576.727 are repealed.
SECTION 19. This 2011 Act being
necessary for the immediate preservation of the public peace, health and
safety, an emergency is declared to exist, and this 2011 Act takes effect on
its passage.
Approved by
the Governor June 16, 2011
Filed in the
office of Secretary of State June 16, 2011
Effective date
June 16, 2011
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