Testimony of William J. Davis
Dairy Services Coordinator
North Dakota Department of Agriculture
House Bill 1129
Senate Agriculture Committee
Roosevelt Park Room
March 13, 2003

Chairman Flakoll, and Committee members, my name is William Davis. I am the Dairy Services Coordinator for the Department of Agriculture. I am here to testify in support of House Bill1129.

This legislation amends the current dairy check-off appropriation so it conforms more closely to the federal check-off rules. The legislation is also in response to required updates to the state dairy laws that have been adopted by reference.

The North Dakota Dairy Promotion Board (NDDPB) asked the North Dakota Department of Agriculture to submit this bill on their behalf to clarify the law as it pertains to the collection of promotion fees. Currently NDDPB collects ten cents per hundredweight on all milk produced and sold by North Dakota dairymen. Those monies are collected by the processors and deposited with the Bank of North Dakota each month. The normal business practice is for the processor to combine all of the fees from the producer's milk proceeds and send one check at the end of each month following the delivery of the milk. This practice makes several processors in violation of the current statute that requires all payments to be made within fifteen days of the delivery month. When audited by the state auditor, the North Dakota Milk Promotion board had been marked for failure to penalize the processors and collect interest for late payments.

NDDPB believes the current law should be amended to allow additional time for processors to submit the fees and to reduce the interest penalty from 10 ½ percent to 1 ½ percent. This action would also make the state law similar to the federal law that collects five cents per hundredweight. The changes provide the needed conformity for the processors to meet state law and federal law when following their customary business practices. The promotion board could also choose not to assess a late penalty if the cash value of the penalty was too small to make it worth their time in billing and collecting it. This is accomplished by changing, in line 21, "must" to "may".

The next three amendments deal with the dairy laws that our state has adopted by reference. The Food & Drug Administration has published ordinances for all states to use. The 2001 Revision of the Pasteurized Milk Ordinances was released for general publication in October 2002. The companion publications of ordinances that govern Interstate Milk Shipments and Methods of Making Sanitation Ratings were released at the same time. It is my recommendation that these laws be amended to reflect the most current revision of dairy law. Mr. Chairman and committee members, I urge a do pass on Senate Bill 1129. Thank you. If any questions, I would be glad to answer them.