This Fiscal Note is not an official copy and should not be quoted or cited.
Fiscal Note - SB 0508 - Establishes mandatory non-binding arbitration for resolution of disputes involving sales and performance of seed
SB 508 - Fiscal Note

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