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Montana Administrative Register Notice 4-14-192 No. 17   09/09/2010    
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BEFORE THE DEPARTMENT OF AGRICULTURE

OF THE STATE OF MONTANA

 

In the matter of the amendment of ARM 4.17.103, 4.17.105, 4.17.106, and 4.17.107 pertaining to the organic program

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NOTICE OF PUBLIC HEARING ON PROPOSED AMENDMENT

 

TO:  All Concerned Persons

 

            1.  On October 4, 2010, at 10:00 a.m., the Department of Agriculture will hold a public hearing in Room 225 of the Scott Hart Building, 302 N. Roberts, Helena, Montana, to consider the proposed amendment of the above-stated rules.

 

2.  The Department of Agriculture will make reasonable accommodations for persons with disabilities who wish to participate in this rulemaking process and need an alternative accessible format of this notice.  If you require an accommodation, contact the Department of Agriculture no later than 5:00 p.m. on September 23, 2010, to advise us of the nature of the accommodation that you need.  Please contact Cort Jensen, Department of Agriculture, 302 N. Roberts, P.O. Box 200201, Helena, Montana, 59620-0201; telephone (406) 444-3144; fax (406) 444-5409; or e-mail: agr@mt.gov.

 

3.  The rules as proposed to be amended provide as follows, new matter underlined, deleted matter interlined:

 

4.17.103  APPOINTMENT AND COMPENSATION OF ORGANIC COMMODITY ADVISORY COUNCIL  (1) through (3)(d) remain the same.

(4)  Appointed members will serve two three-year staggered terms.  Appointed members shall not serve more than two three consecutive terms.

            (5) through (7) remain the same.

 

            AUTH:  80-11-601, MCA

            IMP:  80-11-601, MCA

 

            REASON:  The pool of available qualified persons to serve as council members is very small.  By increasing the term length, the department will save time replacing council members and be more efficient in the management of the program.

 

            FISCAL IMPACT:  There will be no fiscal impact on this rule.

 

            4.17.105  APPLICATION PROCEDURES  (1) through (4) remain the same.

            (5)  Applications must be submitted on forms approved by the department and must be completed, signed, and accompanied by the appropriate fees in order to be considered.  Application forms can be found on the department's web site and will be accepted electronically.  Forms are also available on request from the department.  Applications for continuation of certification are mailed to certified producers no later than January 15 yearly and to certified handlers no less than 90 days prior to the anniversary date of submission of their initial application.

            (6) through (9)(c)  remain the same.

(d)  Applications to continue handler certification are due one year from the date of the previous application no later than September 15 annually.

(10)  through (11)(a)  remain the same.

            (b)  upon receipt of a request to withdraw an application for certification, the department will suspend all actions services related to the application and bill the applicant for all fees due for services rendered up to the time of the department's receipt of the withdrawal request.

 

            AUTH:  80-11-601, MCA

            IMP:  80-11-601, MCA

 

            REASON:  By deleting the January 15 deadline for mailing applications, the department will be able to send information closer to the application deadline with more current information.  Also, clients are able to download the application from the department's web site, reducing the amount of paperwork and postage required by the certification program.

Standardizing the application deadline for handlers to September 15 will equalize the department's workload into two definite time frames, which will allow staff to concentrate on the application process and improve efficiencies.

Replacing the word "action" with "services" clarifies that the department may still pursue enforcement actions, if necessary, after a client withdraws an application for certification.

 

            FISCAL IMPACT:  No direct significant fiscal impact.  Department staff will be more efficient and have less postage costs.

 

            4.17.106  APPLICATION FEES AND FEES FOR SERVICES  (1) through (4) remain the same.

            (5)  The fee for extra certificates of organic operation shall be $5 per form.

            (6)  A fee of $25 shall be charged for checks returned due to nonsufficient funds.

            (7)  A fee of $10 shall be charged for application packets.  Application packets will include a copy of the NOP rules, MDA program rules, a fee schedule, an application form, and an OSP form.  The fee may be applied to application fees.

            (8 5)  Failure to pay application, inspection, or other fees due within the required time will be cause for denying, suspending, or revoking certification.

            (9)  remains the same but is renumbered (6).

            (7)  Inspection fees are due no later than 30 days past billing.  The department shall assess a collection fee of 18% annual percentage rate for any amount past due.  The department may require past due payment of fees prior to providing certification services.

 

            AUTH:  80-11-601, MCA

            IMP:  80-11-601, MCA

 

            REASON:  The proposed rule amendments will allow the department to streamline procedures and be more efficient in its day-to-day business of certifying organic operations.

            The returned checks fee is being deleted because the department rarely receives checks with nonsufficient funds.

            The department proposes eliminating the application packet fee and the need for it to be incorporated into the application fee, thereby reducing the time required to track its individual payment.

            The collection fee for past due inspection charges serves as an incentive for clientele to pay in a timely manner, thereby reducing the time to track unpaid bills and for issuing noncompliances per federal regulations, and thus, improving the efficiencies of program staff.

 

            FISCAL IMPACT:  Removing the fee for additional Certificates of Organic Operation will have no fiscal impact.  These documents are now created and filed electronically by the department and can be distributed to certified operations at little or no cost to the state.  Also, Certified Operations have generally not requested additional copies of their certificates.

            Removal of the fee for nonsufficient funds will have no fiscal impact.  The program has not received any checks with nonsufficient funds, and has not charged the fee, for the past eight years.

            Removal of the application packet fee will have no significant fiscal impact.  By allowing applications to be downloaded from the program web site, the department will save time and expense.  Applications will be sent out only upon request and the cost of the packets will be incorporated into the application fee.

            Adding a collection fee for late payment of inspection fees will impact an estimated 25 operations, at an additional cost of $12 each, and generate $300 in additional revenue to the organic program.  Although difficult to estimate, the timely payment of inspection fees will indirectly save the department a significant amount of time.

 

            4.17.107  ANNUAL REPORT AND ASSESSMENT FEES  (1)  Producers and handlers certified by the department, and new applicants for certification, must submit an annual report of their total gross sales and handling charges for all certified organic production and handling.  Certified producers and new applicants for producer certification shall pay an annual assessment fee to the department as a percentage of gross sales of organically produced products.  Certified handlers and new applicants for handler certification shall pay a flat annual assessment fee based on their reported level of gross sales and handling charges for all products and services included in their Organic Handling System Plans (OHSP):

            (a)  remains the same.

            (b)  the report and fees for both producers and handlers are due along with each operation's annual application to continue certification; and on March 15 annually.

            (c)  if a producer or handler chooses not to continue certification, their sales report and assessment fees are due on the anniversary date of their previous application.

            (2)  remains the same.

            (3)  The assessment fee on gross sales for production certified by the department and one or more additional certifiers is as follows:

            (a)  for sales of products represented as certified by the department, the assessment fee is 1% of gross sales; and

            (b)  for sales of products certified by the department, but represented as certified by a certifier other than the department, the assessment fee is .5% of gross sales.

            (4)  The assessment fee for handlers certified by the department and one or more additional certifiers is the same as the assessment fee for handlers certified only by the department.

            (5 3)  All assessment fees are nonrefundable upon receipt.  The department shall assess a collection fee of 18% annual percentage rate for any amount past due.  The department may require past due payment of fees prior to providing certification services.

 

            AUTH:  80-11-601, MCA

            IMP:  80-11-601, MCA

 

            REASON:  The proposed rule amendments outlined above will allow the department to streamline procedures and be more efficient in its day-to-day business of certifying organic operations.

            The department is clarifying and standardizing when and from whom annual reports and fees are due to resolve issues with late reports and payments.  The language is also meant to clarify that assessments are due for the first year of certification by the department and that assessments are based on organic sales made the previous year, regardless of the certifier.  The language also changes the deadline for gross sales reports and assessments for handlers from their anniversary date to March 15 (the same as for producers) to lessen confusion and to receive funding early in the year for operating the program.

            The assessment fee rule for producers and handlers who are certified by more than one certifier is no longer needed.  This provision was put in place at the beginning of the program when some operations were certifying with the department on a trial basis.  The department did not want to penalize operations who were double certified.  Currently, no operations double certify and the rule is outdated.

            The collection fee for past due inspection charges serves as an incentive for clientele to pay in a timely manner, thereby reducing the time to track unpaid bills and for issuing noncompliances per federal regulations, and thus, improving the efficiencies of program staff.

 

            FISCAL IMPACT:  Removing the assessment fee for operations certified by the department and another certifying agent will have no fiscal impact.

            Adding a collection fee for late payment of assessment fees will impact an estimated 25 operations, at an additional cost of $12 each, and generate $300 in additional revenue to the organic program.  Although difficult to estimate, the timely payment of assessment fees will indirectly save the department a significant amount of labor.

            4.  Concerned persons may submit their data, views, or arguments concerning the proposed action either orally or in writing at the hearing.  Written data, views, or arguments may also be submitted to: Cort Jensen at the Department of Agriculture, 302 North Roberts, P.O. Box 200201, Helena, Montana, 59620-0201; telephone (406) 444-3144; fax (406) 444-5409; or e-mail agr@mt.gov and must be received no later than 5:00 p.m. on October 7, 2010.

 

5.  Cort Jensen, Department of Agriculture, has been designated to preside over and conduct this hearing.

 

6.  The Department of Agriculture maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency.  Persons who wish to have their name added to the list shall make a written request that includes the name, e-mail, and mailing address of the person to receive notices and specifies for which program the person wishes to receive notices.  Notices will be sent by e-mail unless a mailing preference is noted in the request.  Such written request may be mailed or delivered to Montana Department of Agriculture, 302 North Roberts, P.O. Box 200201, Helena, MT 59620-0201; fax: (406) 444-5409; or e-mail: agr@mt.gov or may be made by completing a request form at any rules hearing held by the department.

 

7.  An electronic copy of this Notice of Proposed Amendment is available through the department's web site at www.agr.mt.gov, under the Administrative Rules section.  The department strives to make the electronic copy of the notice conform to the official version of the notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the notice and the electronic version of the notice, only the official printed text will be considered.  In addition, although the department works to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems.

 

            8.   The effective date will be no sooner than December 31, 2010.

 

9.  The bill sponsor contact requirements of 2-4-302, MCA, apply and have been fulfilled.  The primary bill sponsor was contacted by regular mail, e-mail, and phone on August 30, 2010.  For previous rule projects involving the same bill, the primary sponsor was given appropriate notice.

 

DEPARTMENT OF AGRICULTURE

 

 

 

/s/ Cort Jensen                                              /s/ Ron de Yong                                

Cort Jensen                                                   Ron de Yong

Rule Reviewer                                               Director, Department of Agriculture

           

Certified to the Secretary of State August 30, 2010.

 

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