La. Admin. Code tit. 7 § XXXVI-109

Current through Register Vol. 50, No. 9, September 20, 2024

Section XXXVI-109 - Cooperative Endeavors and Agreements

A. Written Contractual Agreements

1. All certified market participants who seek incentive payments shall enter into a written certified market participant contract with the board, which shall be executed by the commissioner.

2. The certified market participant contract shall contain the following provisions, to wit:

a. a statement of the purposes, goals and objectives of the agreement;

b. the name of both parties;

c. the time period covered by the contract indicating a beginning and ending date;

d. a provision for the termination of the certified market participant contract by the board after an adjudicatory hearing in which the certified market participant is held to be in violation of the Act or certified market participant contract;

e. a provision that if any provisions of the written agreement are unenforceable then all of the provisions of the written agreement shall be unenforceable and the cooperative endeavor agreement shall be null, void and of no effect;

f. certification and agreement by the applicant that the financial and other records required to be maintained by certified market participant contract shall be accurate and shall be maintained on a current basis and copies shall be provided to the commissioner on request;

g. a provision that requires the board and the certified market participant to comply with all of the provisions and requirements of the Act;

h. a provision that the certified market participant shall enter into producer contracts or agency contracts after the board has approved their certified market participant confidential business plan;

i. provisions that the certified market participant specify the type of origin of agriculture commodities or products to be used and provisions that specify limitations and conditions for changes in the type and origin of agriculture commodities or products depending on availability of supply and costs;

j. a provision that acknowledges the right of the board to deduct monthly from each certified market participant's incentive payments, in accordance with the Act, funds to pay the costs of administration of the board, their employees, attorneys and auditors;

k. a provision prohibiting the certified market participant from being a producer, grain dealer, warehouseman or blender, or owning a substantial interest in a blender doing business in Louisiana without prior approval of the board;

l. a provision that the agreement may be terminated if the certified market participant:

i. fails to notify the board in writing of the transfer of sale of an ownership interest in the designated certified market participant within 15 days of such transfer or sale;

ii. fails to provide the board within 30 days of the transfer or sale the necessary affidavit(s) relating to ownership and/or management as required by the application; and

iii. fails to receive from the board a letter of acknowledgment stating that such transfer or sale or ownership interest has been duly noted and the certified market participant is authorized to continue under the cooperative endeavor agreement;

m. a provision that the agreement may be terminated upon the insolvency, bankruptcy or assignment for benefit of creditors by the certified market participant; and

n. a provision recognizing that under the provisions of the Agricultural Ethanol Production Law, all incentive payments shall be made subject to the availability of funds derived from the taxes imposed on gasohol and agreeing that the cooperative endeavor created no obligation on the part of the state to make incentive payments from any other source.

3. Agency and producer contracts entered into by a certified market participant shall contain the following general provisions, to wit:

a. name and address of all parties;

b. the time period covered by the contract indicating a beginning and ending term;

c. date of contract;

d. terms of price, quantity, delivery, quality, charges, deductions, payments, all commissions, fees and other financial arrangements;

e. agreement to all inspection of records and premises and to maintain and provide on request by the commissioner all records and documents required by the Act, rules or any certified market participant, agency or producer contract;

f. agreement to comply with the Act and rules;

g. identity the producer of the agriculture commodity or product;

h. attestation and verification by the producer that the agricultural commodities or products delivered to the certified market participant, grain dealer or warehouseman were grown by the producer at a location specified in the contract;

i. a requirement that shipments to intermediaries shall not be commingled and a separate scale ticket shall be maintained and given the producer;

j. a requirement that settlement sheets be kept by intermediaries on forms specified by the commissioner;

k. a provision that producers agree to permit the commissioner to enter their property to examine the contracted crops and to audit the producer's financial and agricultural commodities or product records relating to the commodity or product sold to produce ethanol;

l. a provision specifying the method and time of payment as well as the certified market participant method of assurance for guaranteed performance on the contract;

m. a provision that assigns the certified market participant's incentive payments to pay the producer contracts, however, this provision may be deleted from the contracts if the certified market participant provides acceptable assurances and guarantees to the board that it can meet its contractual obligations;

n. a provision that authorizes the board to make payments directly to producers or intermediaries when there has been an assignment of incentive payments by the certified market participant; and

o. a provision that, based on the commissioner's audit or a written complaint filed by a party to an agency or producer contract, the board may hold an adjudicatory hearing to resolve any differences about quality of the agriculture commodity or product among the parties.

4. Special provisions may be in agency and producer contracts but shall require prior approval of the board.

5. Periodically, applicants or certified market participants shall discuss with the board their certified market participant confidential business plan which shall contain their proposed agency and producer contracts and other information and data indicating how they will seek to achieve the purposes and objectives of the cooperative endeavor agreement.

a. The certified market participant confidential business plan(s) shall be kept in the certified market participant's principal office and shall be available for audit by the commissioner.

b. The certified market participant confidential business plan shall be numbered and dated sequentially with a corresponding, coordinated numbering system for all contracts proposed therein.

B. Authority to approve written contractual agreements. The board shall have absolute discretion to approve or disapprove all certified market participant contracts, agency contracts or producer contracts, and any modifications or amendments to the contracts must be in writing and will be subject to the prior approval of the board.

C. Procedure for Approval of Written Contractual Agreements

1. All contracts must be submitted to the commissioner for his review.

2. The board shall vote in a public meeting on each certified market participant contract. Six affirmative votes shall be required to approve or disapprove any contract.

3. The certified market participant confidential business plan shall be considered by the board only in executive session pursuant to the requirements of R.S. 3:3708(A) and R.S. 42:6.1(A)(1)(2)(4) and (8) and shall be approved by the board in open session with the action being taken by name of the certified market participant, the plan number, the date of discussion and the agency and producer contract numbers approved.

4. Certified market participant confidential business plans shall not be considered a public record.

5. Agency and producer contracts approved as part of a certified market participant confidential business plan shall be public records when they are filed and registered with the board and shall become effective between the parties only after they have been filed and registered with the board. The board may authorize the filing and registration of agency and producer contracts with the central registry.

La. Admin. Code tit. 7, § XXXVI-109

Promulgated by the Department of Agriculture and Forestry, Office of Management and Finance, Agricultural Industry Board, LR 12:506 (August 1986).

AUTHORITY NOTE: Promulgated in accordance with R.S. 3:3704.