Louisiana Administrative Code
Title 7 - AGRICULTURE AND ANIMALS
Part XXXVI - Agricultural Ethanol Production
Chapter 1 - Agricultural Ethanol Productions
Section XXXVI-109 - Cooperative Endeavors and Agreements
Universal Citation: LA Admin Code XXXVI-109
Current through Register Vol. 50, No. 9, September 20, 2024
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.
AUTHORITY NOTE: Promulgated in accordance with R.S. 3:3704.
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