HB1988 HD1

SECTION 1. Chapter 148, Hawaii Revised Statutes, is amended by adding a new part to be appropriately designated and to read as follows:

"Part . macadamia nut commission

§148-A Definitions. For purposes of this part, unless the context otherwise requires:

"Chairperson" means the chairperson of the board of agriculture.

"Commission" means the macadamia nut commission.

"Processor" or "first handler":

(1) Means any person, within the state, engaged in the operations of husking, processing, and marketing macadamia nuts:

(A) That the person produced, purchased, or acquired from a producer; or

(B) On behalf of a producer, as owner, agent, employee, broker, or otherwise; and

(2) Does not include a retailer, except for a retailer who purchases or acquires from, or husks, processes, and markets on behalf of any producer, macadamia nuts that were not previously subject to regulation by the commission.

"Producer" or "grower" means any person who is engaged in this state in the business of producing or causing to be produced for market, macadamia nuts.

"Producer-supplier" means any producer who engages in the operations of selling, marketing, or distributing macadamia nuts that the person has produced, purchased, or acquired from a processor. The term does not include a retailer, except a retailer who purchases or acquires from, or sells, markets, or distributes on behalf of a producer, macadamia nuts that were not previously subject to regulation by the commission.

§148-B Macadamia nut commission; established; members. (a) There is established within the department of agriculture for administrative purposes the macadamia nut commission consisting of nine members appointed by the chairperson.

(b) The members of the commission shall be appointed from a list of nominees submitted by the board of directors of the Hawaii Macadamia Nut Association; provided that members nominated and appointed shall be members of the board of directors of the Hawaii Macadamia Nut Association in good standing; and provided further the members nominated and appointed shall represent the existing membership divisions that have been in place and draw from large and small growers, growing districts, and processors. The members of the commission shall elect a commission chairperson by a majority vote of the members. Each member of the commission shall serve a term of years.

§148-C Commission; purpose; power and duty. (a) The commission shall administer and manage the collection of the mandatory assessment provided for in section 148-E and shall use the revenue collected to accomplish the following strategic objectives:

(1) Establishment of an initial research committee to develop a list of research projects to propose to the legislature, University of Hawaii, Pacific Basin Agricultural Research Center, and other related entities to restart macadamia nut research in Hawaii, including at the University of Hawaii, and elsewhere; provided that the research committee shall also develop a plan to make existing research available to all members of the commission;

(2) Negotiation and lobbying efforts to achieve country of origin labeling at a federal level through the Hawaii Congressional delegation and through the governor and state agencies; provided that these efforts shall promote the "truth in labeling" approach; provided further that as part of these efforts, the commission shall seek to have a certificate of analysis requirement, along with date of manufacture, on all macadamia nuts sold in the United States;

(3) Reconnection with the International Nut and Dried Fruit Council Foundation's nutrition program, collection of existing macadamia nut nutrition research to be made available to processors and marketers of Hawaii macadamia nuts, and increased involvement with other selected industry groups that will assist the commission and the Hawaii Macadamia Nut Association in accomplishing their objectives; and

(4) Development of a Hawaii industry approach, including the most effective means of developing and disseminating information, both industry and corporate related, and the best means to use state resources to accomplish this goal; provided that the commission may also establish a relationship with the international macadamia association if deemed beneficial.

(b) The commission may:

(1) Appoint committees composed of members and nonmembers to advise the commission;

(2) Accept gifts, contributions, or appropriations of private, state, or federal funds;

(3) At the commission's sole discretion, defray operating costs of the commission through a portion of the revenues collected from the mandatory assessment;

(4) Establish an annual budget pursuant to accepted accounting practices; and

(5) Take other action necessary to carry out the purposes of this part.

§148-D Moneys received by commission; agent; bond. All moneys received from assessments or otherwise received by the commission shall be deposited into any bank the commission may designate. Moneys shall be disbursed by the commission through any agent designated by the commission for that purpose. Any agent shall be bonded by a fidelity bond, executed by a surety company authorized to transact business in the state in favor of the commission in the amount of not less than $25,000.

§148-E Assessments. The commission shall, no later than July 1 of each year, establish an assessment for the following macadamia nut season; provided that beginning on July 1, 2008, the assessment shall be one-fifth of one cent per pound of nut in shell at twenty per cent moisture produced by each producer, and an additional one-fifth of one cent per pound of nut in shell at twenty per cent moisture for each processor. The assessment may be changed by the commission from time to time only by agreement of ninety per cent of the members of the Hawaii Macadamia Nut Association. The maximum assessment for any single entity shall be $30,000 annually.

§148-F Producer assessments; processor liability. (a) The first handler of macadamia nuts being assessed shall deduct the assessment from amounts paid to the producer or collect the assessment from the producer. The first handler shall be a trustee of the funds until the assessment is paid to the commission.

(b) Every processor shall be personally liable for payment of the collected assessments. Failure of the processor to collect the assessment from any producer shall not exempt the processor from liability.

§148-G Failure to pay assessment. Any assessment levied pursuant to this part is a personal debt of the producer assessed. Failure of a processor to make payment of the collected assessment to the commission shall not relieve the producer of this obligation.

§148-H Penalties. (a) Any producer or processor who fails to file a return or to pay any assessment within the time required by the commission shall pay to the commission a penalty of ten per cent of the amount of the assessment determined to be past due, in addition to interest on the unpaid balance at the rate of 11.5 per cent per month.

(b) In addition to any other penalty, the commission may require any person who fails to pay any assessment or related charge to furnish and maintain a surety bond in a form and amount and for a period of time specified by the commission as assurance that payment to the commission will be made when due.

§148-I Exemptions. (a) This part does not apply to macadamia nuts produced only for the producer's home use or to macadamia nuts used only for ornamental purposes.

(b) To claim the exemption, a producer shall file an affidavit with the commission to establish that the producer's macadamia nuts are not produced for commercial purposes.

(c) Any production of macadamia nuts in excess of one thousand pounds shall not be exempt from assessment established in this part.

§148-J Processor records. (a) Processors shall keep a complete and accurate record of all macadamia nuts processed, including the name of the producer whose macadamia nuts were processed. The records shall contain information as the commission shall prescribe.

(b) Records shall be preserved by the processor for two years and shall be submitted for inspection at a reasonable time upon the written request of the commission.

§148-K Liability. (a) The State shall not be liable for any act of the commission or its contracts.

(b) Payment of all claims arising by reason of the administration of this part or acts of the commission shall be limited to the funds collected by the commission.

(c) No member, alternate member, or employee of the commission shall be personally liable on any contract of the commission or responsible individually to any producer, processor, producer-supplier, or any other person for any error in judgment, mistake, or other act of commission or omission as principal, agent, or employee, except for the individual's own act or dishonesty or crime.

(d) No member or alternate member of the commissions shall be responsible individually for any act or omission of any member of the commission.

(e) Liability of the commissioners is several and not joint, and no member is liable for the default of any other member of the commission.

§148-L Proprietary information. All proprietary information obtained or received by the commission from producers, processors, or producer-suppliers shall be confidential and shall not be disclosed, except pursuant to a court order after a hearing in a judicial proceeding involving this part."

SECTION 2. There is appropriated out of the general revenues of the State of Hawaii the sum of $ or so much thereof as may be necessary for fiscal year 2008-2009 for the promotion and expansion of the macadamia nut industry in the state by the Hawaii Macadamia Nut Association and for the establishment of the macadamia nut commission.

The sum appropriated shall be expended by the department of agriculture for the purposes of this Act.

SECTION 3. In codifying the new sections added by section 1 of this Act, the revisor of statutes shall substitute appropriate section numbers for the letters used in designating the new sections in this Act.

SECTION 4. This Act shall take effect upon its approval; provided that section 2 shall take effect on July 1, 2008.

HOUSE OF REPRESENTATIVES	H.B. NO.	1988
TWENTY-FOURTH LEGISLATURE, 2008		H.D. 1
STATE OF HAWAII