COMMITTEE ON LEGISLATIVE RESEARCH
OVERSIGHT DIVISION
FISCAL NOTE
L.R. NO.: 2125-01
BILL NO.: SB 508
SUBJECT: Seed Law Arbitration
TYPE: Original
DATE: April 12, 1999
FISCAL SUMMARY
ESTIMATED NET EFFECT ON STATE FUNDS | |||
FUND AFFECTED | FY 2000 | FY 2001 | FY 2002 |
Arbitration Council Fund | $0 | $0 | $0 |
Total Estimated
Net Effect on All State Funds |
$0 | $0 | $0 |
ESTIMATED NET EFFECT ON FEDERAL FUNDS | |||
FUND AFFECTED | FY 2000 | FY 2001 | FY 2002 |
None | $0 | $0 | $0 |
Total Estimated
Net Effect on All Federal Funds |
$0 | $0 | $0 |
ESTIMATED NET EFFECT ON LOCAL FUNDS | |||
FUND AFFECTED | FY 2000 | FY 2001 | FY 2002 |
Local Government | $0 | $0 | $0 |
Numbers within parentheses: ( ) indicate costs or losses
This fiscal note contains 4 pages.
FISCAL ANALYSIS
ASSUMPTION
The Office of the Attorney General assumes the duties in this proposal could be accomplished with existing resources.
The Department of Revenue (DOR) assumes they would not be fiscally impacted by this proposal.
The Department of Agriculture (AGR) assumes several states have added mandatory non-binding arbitration to their seed laws. Seed that is labeled subject to mandatory non-binding arbitration that does not meet labeled expectation and where prior settlement has not been made requires a complaint be filed with a filing fee to an arbitration council who will investigate said claim and hold hearing and make recommendations as to fault, if any, to the parties involved. The decision of arbitration council is non-binding unless a contract has been signed between the buyer and seller. The cost of the investigation will be paid by the loser of the arbitration and will go into an arbitration fund (not state fund) to be used solely for paying the cost of investigation of each arbitration case. Mandatory and non-binding arbitration provides a mean so settling disputes over the performance of seed if both the buyer and seller are agreeable to accept the arbitration council's decision. Therefore, the AGR assumes they would not be fiscally impacted by this proposal.
Oversight assumes the proposal says the filing fees and the money collected to cover the cost of investigating complaints are not state funds. However, the proposal also says money deposited into the Arbitration Council Fund is subject to appropriation.
Oversight assumes there would be unknown income to the Arbitration Council Fund from filing fees and money collected to cover the cost of investigating claims and making settlements. This fund would also have unknown costs for conducting investigations and settling claims. Oversight assumes the revenue and costs would net to zero.
FISCAL IMPACT - State Government | FY 2000 | FY 2001 | FY 2002 |
(10 Mo.) | |||
ARBITRATION COUNCIL FUND | |||
Income - AGR | |||
fees, cost reimbursements, and | |||
settlement payments | Unknown | Unknown | Unknown |
FISCAL IMPACT - State Government | FY 2000 | FY 2001 | FY 2002 |
(continued) | (10 Mo.) | ||
Cost - AGR | |||
investigation costs and settlements | (Unknown) | (Unknown) | (Unknown) |
Estimated Net Effect on | |||
ARBITRATION COUNCIL FUND | $0 | $0 | $0 |
FISCAL IMPACT - Local Government | FY 2000 | FY 2001 | FY 2002 |
(10 Mo.) | |||
0 | 0 | 0 | |
FISCAL IMPACT - Small Business | |||
Small businesses who sell or purchase seeds may be effected as result of this proposal. Settlements may be reached through not-binding arbitration rather than through the courts. | |||
DESCRIPTION
This act establishes the mandatory non-binding arbitration council and procedures to settle disputes involving seed sales and performance. The council will be chosen by and established by the Department of Agriculture. The council is comprised of three members and their alternates chosen by the Director of the Department of Agriculture with one member and alternate from each of the following three categories: (1) the seed industry; (2) a farmer-producer; and (3) the university or state government.
The council is authorized to contract with the Department of Agriculture to provide the service of settling disputes as well as outside entities or other agencies for the investigation of sworn complaints. The cost of filing a sworn complaint is $250. All costs incurred for investigation as well as the filing fee shall be the responsibility of the loser of the dispute.
This act also creates the "Arbitration Council Fund" to receive all money credited to the arbitration council as a result of filing fees and money from the loser of the dispute to cover the cost of the investigation.
Appeal of the decision of the council would be made in circuit court. Information generated in the investigative process of the council may be used in any legal proceeding.
DESCRIPTION (continued)
This legislation is not federally mandated, would not duplicate any other program and would not require additional capital improvements or rental space.
SOURCES OF INFORMATION
Department of Agriculture
Department of Revenue
Office of the Attorney General
Jeanne Jarrett, CPA
Director
April 12, 1999