SB3242

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:

"Processor" and "first handler":

(1) Mean any person, within the State, engaged in the operation of hulling and roasting 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.

(2) Does not include a retailer, except for a retailer who purchases or acquires from, or hulls and roasts 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, or 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 members appointed by the chairperson of the board of agriculture.

(b) The members shall be appointed from a list of nominees submitted by organizations and individuals in the macadamia nut industry who, commencing on September 1, 2008, and by September 1, every two years thereafter, shall submit a list of nominees to the chairperson. Members shall include eight representatives of large and small growers and processors and one representative of the public. The public member shall be appointed from nominees recommended by the commission.

(d) The members of the macadamia nut commission shall serve without compensation but shall be reimbursed for expenses, including travel expenses, necessary for the performance of their duties.

§148-C Commission; purpose; power and duty. (a) The commission shall develop and manage a national and international advertising and promotion program to ensure that the macadamia industry in the State can compete successfully in the world marketplace. The commission shall carry engage in advertising, promotion, education, marketing research, and production research relating to the macadamia nut industry.

(b) The commission may:

(1) Employ a manager to serve at the pleasure of the commission as president and chief executive officer of the commission, and other personnel necessary to carry out the purpose of this part:

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

(3) Establish an office and incur expenses, invest funds in permissible investments, enter into contracts and agreements, create liabilities and borrow funds in advance of receipt of assessments as necessary;

(4) Promote the sale of macadamia nuts by advertising and other promotional means, including cost-sharing advertising of macadamia nuts or other complimentary products and brand credit advertising to maintain and expand present markets and create new markets;

(5) Recommend to the chairperson of the board of agriculture adoption of macadamia nut quality standards, product labeling, or other activity authorized under this chapter;

(6) Serve in an advisory capacity to the chairperson of the board of agriculture on all matters relating to this part;

(7) Educate the public on the uses, healthful properties, and nutritional value of macadamia nuts;

(8) Require processors and producers-suppliers to provide records and other information necessary for the commission to carry out its duties, including information regarding inventories, shipment destinations, and related information. These records and information shall be preserved by the processor or producer-supplier for two years and shall be submitted for inspection at any reasonable time upon written demand of the commission;

(9) Educate and instruct wholesale and retail trade regarding proper methods of handling and selling macadamia nuts, including market surveys and analysis, factual presentations, and negotiations with state, federal, and foreign agencies relating to marketing of macadamia nuts;

(10) Contract to render service in formulating and conducting plans and programs, and other agreements the commission may determine necessary to promote the sale of macadamia nuts;

(11) Conduct or contract for others to conduct scientific research, including the study, analysis, dissemination, and accumulation of information obtain from research regarding cultural and production practices, and marketing and distribution of macadamia nuts;

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

(13) Establish an assessment rate to defray operating costs of the commission;

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

(15) Administer any governmental program establishing quality standards for the macadamia nut industry upon request of an authorized agent of a governmental agency; and

(16) Other things necessary to carry out the purpose 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. (a) Not later than October 1 of each year, the commission shall establish an assessment for the marketing season that begins September 1 and continues through August 31 of the following year. The assessment shall not exceed five per cent of the average price received by producers, computed on a per pound basis or computed in any other manner determined by the commission to be reasonably equivalent to the per pound computation.

(b) The commission may revise the assessment established prior to October 1 of each year if it determines, based on information including crop volume, that the action is necessary and the revision does not exceed assessment limitations specified in this section. Any revision shall be made prior to the date established by the commission for payment of the assessment.

§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 requires 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 if several and not joint, and no member is liable for the default of any other member of the commission.

§148-L Proprietary information. (a) 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.

(b) Information on volume shipments, crop value, and other related information required for reports to governmental agencies, financial reports to the commission, or aggregate sales and inventory information, and other information that processors or producer-suppliers request from the commission to receive in total, excluding individual process or producer-supplier information, may be disclosed by the commission."

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.

INTRODUCED BY:	_____________________________

THE SENATE	S.B. NO.	3242
TWENTY-FOURTH LEGISLATURE, 2008
STATE OF HAWAII