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Senate
File
2276
-
Introduced
SENATE
FILE
2276
BY
WAHLS
A
BILL
FOR
An
Act
providing
for
the
processing
and
marketing
of
meat
1
and
poultry
products,
including
by
prohibiting
vertical
2
integration,
providing
for
a
health
and
safety
program,
and
3
providing
for
the
divestiture
of
interests
in
processors
by
4
certain
retailers,
and
providing
penalties.
5
BE
IT
ENACTED
BY
THE
GENERAL
ASSEMBLY
OF
THE
STATE
OF
IOWA:
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Section
1.
NEW
SECTION
.
202D.1
Title.
1
This
chapter
be
shall
be
known
and
may
be
cited
as
the
2
“Retailer-Processor
Fairness
Act”
.
3
Sec.
2.
NEW
SECTION
.
202D.2
Definitions.
4
As
used
in
this
chapter,
unless
the
context
otherwise
5
requires:
6
1.
a.
“Covered
good”
means
a
grocery
item,
including
7
packaged
food
or
unpackaged
food.
8
b.
“Covered
good”
does
not
include
motor
fuel,
prescription
9
drugs,
tobacco
products,
or
alcoholic
beverages.
10
2.
“Department”
means
the
department
of
agriculture
and
land
11
stewardship.
12
3.
“Dominant
retailer”
means
any
of
the
following:
13
a.
A
person
that
has
annual
retail
sales
of
covered
goods
14
in
an
aggregate
amount
exceeding
eighteen
billion
dollars
15
as
adjusted
each
year
by
an
amount
equal
to
the
percentage
16
increase,
if
any,
in
the
consumer
price
index
for
all
urban
17
consumers
for
the
last
available
twelve-month
period
published
18
in
the
federal
register
by
the
federal
department
of
labor,
19
bureau
of
labor
statistics.
20
b.
A
person
who
owns
or
operates
at
least
one
storefront
21
or
distribution
center
located
in
more
than
twenty
states,
22
including
this
state.
23
4.
“Processor”
means
any
establishment,
plant,
or
operation
24
engaged
in
the
slaughter,
fabrication,
processing,
or
packing
25
of
livestock
or
poultry,
including
but
not
limited
to
the
26
production
of
beef,
pork,
lamb,
chicken,
or
turkey
products.
27
5.
“Producer”
means
a
person
who
holds
a
legal
interest
in
a
28
land
or
facility
where
livestock
or
poultry
are
produced.
29
Sec.
3.
NEW
SECTION
.
202D.11
Prohibition
on
vertical
30
integration.
31
1.
A
dominant
retailer
shall
not
engage
in
vertical
32
integration
by
doing
any
of
the
following:
33
a.
Owning
or
controlling
a
processor
including
through
34
direct
ownership,
partial
ownership,
an
exclusive
contract,
or
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the
ownership
or
control
of
a
livestock
operation.
A
dominant
1
retailer,
or
a
dominant
retailer’s
purchasing
agent,
shall
not
2
directly
or
indirectly
acquire,
hold,
or
maintain,
in
whole
or
3
in
part,
an
ownership
or
controlling
interest
in
a
processor.
4
b.
Entering
into
an
exclusive
contract
with
a
producer
that
5
requires
the
sale
of
livestock
or
poultry
only
to
that
dominant
6
retailer
or
a
processor
owned
or
controlled
by
the
dominant
7
retailer.
8
2.
A
dominant
retailer
is
liable
for
a
violation
of
this
9
subchapter
committed
by
a
third
party
contracted
by
the
10
dominant
retailer.
11
Sec.
4.
NEW
SECTION
.
202D.12
Rulemaking.
12
The
attorney
general,
in
consultation
with
the
department,
13
shall
adopt
rules
pursuant
to
chapter
17A
to
administer
and
14
enforce
this
chapter.
15
Sec.
5.
NEW
SECTION
.
202D.13
Administration
and
16
enforcement.
17
1.
The
attorney
general,
in
consultation
with
the
18
department
of
agriculture
and
land
stewardship,
shall
determine
19
which
dominant
retailers
are
engaging
in
vertical
integration
20
as
prohibited
in
section
202D.11.
In
making
this
determination
21
the
attorney
general
shall
do
all
of
the
following:
22
2.
a.
Not
later
than
September
1,
2027,
and
every
two
23
years
thereafter,
assess
each
person
operating
as
a
retailer
24
of
covered
goods
within
the
state
and
make
a
preliminary
25
determination
of
whether
the
person
is
a
dominant
retailer
26
acting
in
violation
of
section
202D.11.
27
b.
Publish
a
preliminary
list
of
the
name
and
address
of
28
each
person
that
the
attorney
general
has
initially
determined
29
to
be
acting
in
violation
of
section
202D.11.
30
3.
Not
later
than
October
1,
2027,
and
every
two
years
31
thereafter,
if
necessary,
the
attorney
general,
in
consultation
32
with
the
department,
shall
conduct
an
inquiry
regarding
whether
33
a
person
is
a
dominant
retailer
acting
in
violation
of
section
34
202D.11.
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a.
In
conducting
the
inquiry,
the
attorney
general
shall
do
1
all
of
the
following:
2
(1)
Accept
evidence,
in
affidavit
form,
signed
by
an
3
individual
authorized
to
represent
the
person
named
on
the
4
preliminary
list
stating
that
the
named
person
is
not
a
5
dominant
retailer
acting
in
violation
of
section
202D.11.
The
6
affidavit
shall
be
sworn
to
by
the
affiant
before
an
individual
7
who
has
authority
to
administer
the
oath,
under
penalty
of
8
perjury.
9
(2)
Accept
petitions
or
public
comment
submitted
by
10
interested
persons,
that
includes
evidence
that
a
person
is
11
a
dominant
retailer
acting
or
not
acting
in
violation
of
12
section
202D.11.
The
evidence
shall
be
admitted
using
the
same
13
standard
as
provided
in
section
17A.4.
14
b.
Within
thirty
days
of
accepting
all
evidence
described
in
15
paragraph
“a”
,
the
attorney
general,
in
consultation
with
the
16
department,
shall
make
a
final
decision
as
to
whether
a
person
17
is
a
dominant
retailer
acting
in
violation
of
section
202D.11.
18
The
attorney
general’s
final
decision
constitutes
final
agency
19
action
under
chapter
17A,
and
the
person
may
seek
judicial
20
review
of
such
agency
action
pursuant
to
section
17A.19.
21
4.
Notwithstanding
subsection
3,
a
person
included
on
22
the
preliminary
list
as
provided
in
subsection
2
may
demand
23
a
contested
case
proceeding
as
provided
in
chapter
17A
to
24
determine
the
question
of
whether
the
person
is
a
dominant
25
retailer
acting
in
violation
of
section
202D.11.
The
attorney
26
general’s
final
decision
constitutes
final
agency
action
under
27
chapter
17A
and
the
person
may
seek
judicial
review
of
such
28
agency
action
pursuant
to
section
17A.19.
29
5.
The
attorney
general
shall
publish
a
final
list
of
the
30
name
and
address
of
each
person
that
the
attorney
general
has
31
determined
to
be
a
dominant
retailer
acting
in
violation
of
32
section
202D.11.
A
person
shall
not
be
included
on
the
final
33
list
until
after
the
time
that
the
person’s
right
to
seek
34
judicial
review
has
expired
or
after
all
judicial
review
of
the
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person’s
rights
has
been
exhausted,
and
the
attorney
general’s
1
final
decision
has
been
upheld.
The
final
list
shall
be
posted
2
on
the
attorney
general’s
internet
site.
3
Sec.
6.
NEW
SECTION
.
202D.14
Compliance.
4
1.
Not
later
than
thirty
days
after
the
attorney
general
5
publishes
a
final
list
that
includes
the
name
of
a
person
who
6
the
attorney
general
has
determined
to
be
a
dominant
retailer
7
acting
in
violation
of
section
202D.11,
the
person
must
submit
8
a
compliance
plan
to
the
attorney
general
for
approval
by
the
9
attorney
general
acting
in
cooperation
with
the
department.
10
The
compliance
plan
shall
specify
how
the
dominant
retailer
11
will
do
all
of
the
following:
12
a.
Divest
itself
of
any
interest
in
a
processor
owned
or
13
controlled
by
the
dominant
retailer.
14
b.
Relinquish
any
interest
in
a
contract
entered
into
with
15
a
producer.
16
2.
a.
A
person
whom
the
attorney
general
has
determined
to
17
be
a
dominant
retailer
acting
in
violation
of
section
202D.11
18
included
on
the
final
list
described
in
subsection
1
must
19
comply
with
section
202D.11
within
one
year
from
the
date
the
20
final
list
is
published.
21
b.
Notwithstanding
paragraph
“a”
,
the
attorney
general
22
may,
upon
request
of
the
person
described
in
paragraph
“a”
,
23
extend
the
date
of
compliance
by
one
hundred
eighty
days
if
the
24
attorney
general
determines
that
the
person
is
acting
in
good
25
faith
to
complete
the
compliance
plan.
The
attorney
general
26
may
base
the
decision
to
extend
the
period
for
compliance
on
27
criteria
established
by
the
attorney
general.
28
Sec.
7.
NEW
SECTION
.
202D.15
Injunctive
relief.
29
The
attorney
general
or
a
county
attorney
may
apply
to
the
30
district
court
for
injunctive
relief
in
order
to
restrain
a
31
person
from
acting
in
violation
of
this
chapter.
32
Sec.
8.
NEW
SECTION
.
202D.16
Civil
penalty.
33
A
person
who
violates
a
provision
of
this
chapter
or
rules
34
adopted
or
orders
issued
under
this
chapter
is
subject
to
a
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civil
penalty
of
twenty-five
thousand
dollars.
Each
day
of
1
a
violation
constitutes
a
separate
offense.
Moneys
imposed,
2
assessed,
and
collected
by
the
attorney
general
will
be
3
credited
to
the
general
fund
of
the
state.
4
Sec.
9.
NEW
SECTION
.
202D.21
Health
and
safety
program.
5
1.
a.
The
department
shall
establish
and
administer
a
6
program
for
processors
who
comply
with
fair
labor
practices
7
with
financial
incentives
to
support
health
and
safety
8
practices
for
their
employees.
9
b.
As
used
in
paragraph
“a”
,
“fair
labor
practices”
includes
10
a
processor’s
commitment
to
bargain
with
unions
or
associations
11
representing
the
processor’s
employees.
12
2.
The
department
shall
implement
this
program
when
the
13
general
assembly
appropriates
moneys
required
to
support
its
14
administration
of
a
health
and
safety
program
to
be
implemented
15
by
participating
processors.
16
Sec.
10.
CODE
EDITOR
DIRECTIVE.
The
Code
editor
shall
17
divide
chapter
202D,
as
enacted
in
this
Act,
into
subchapters
18
and
shall
designate
sections
202D.1
through
202D.10
as
19
subchapter
I,
sections
202D.11
through
202D.20
as
subchapter
20
II,
and
section
202D.21
as
subchapter
III.
21
EXPLANATION
22
The
inclusion
of
this
explanation
does
not
constitute
agreement
with
23
the
explanation’s
substance
by
the
members
of
the
general
assembly.
24
GENERAL.
This
bill
creates
new
Code
chapter
202D,
25
providing
for
the
processing
and
marketing
of
meat
and
poultry
26
products.
The
new
Code
chapter
is
divided
into
subchapter
27
I,
which
includes
general
provisions
including
definitions,
28
subchapter
II,
which
prohibits
certain
retailers
of
food
items
29
from
engaging
in
vertical
integration,
and
subchapter
III,
30
which
provides
a
health
and
safety
program
for
participating
31
processors.
32
TERMS.
Under
the
bill,
a
dominant
retailer
is
a
person
33
that
meets
one
of
two
criteria:
(1)
has
annual
retail
sales
34
of
covered
goods
exceeding
$18
billion
or
(2)
operates
at
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least
one
storefront
or
distribution
center
located
in
more
1
than
20
states,
including
this
state.
A
covered
good
includes
2
grocery
items,
but
excludes
motor
fuel,
prescription
drugs,
3
tobacco
products,
or
alcoholic
beverages.
A
processor
is
an
4
establishment
engaging
in
the
slaughter
or
preparation
of
meat
5
or
poultry
products.
A
producer
is
a
person
that
has
a
legal
6
interest
in
land
or
a
facility
where
livestock
or
poultry
are
7
produced.
8
PROHIBITION
ON
VERTICAL
INTEGRATION
——
GENERAL.
The
9
bill
prohibits
a
dominant
retailer
from
engaging
in
vertical
10
integration
that
includes
(1)
owning
or
controlling
a
processor
11
or
(2)
entering
into
an
exclusive
contract
with
a
producer
12
that
requires
the
sale
of
meat
or
poultry
only
to
the
dominant
13
retailer
or
a
processor
controlled
by
the
dominant
retailer.
14
PROHIBITION
ON
VERTICAL
INTEGRATION
——
ADMINISTRATION
OR
15
ENFORCEMENT.
The
bill
is
administered
by
the
attorney
general
16
in
consultation
with
the
department
of
agriculture
and
land
17
stewardship
(DALS).
The
attorney
general
must
investigate
18
which
dominant
retailers
are
engaging
in
vertical
integration.
19
Every
two
years
the
attorney
general
must
conduct
an
inquiry
20
and
make
a
preliminary
determination
regarding
whether
a
person
21
is
a
dominant
retailer
acting
in
violation
of
the
bill’s
22
provisions
prohibiting
vertical
integration.
The
attorney
23
general
must
make
a
determination
based
on
evidence
submitted
24
by
the
person
and
interested
persons.
However,
a
person
25
subject
to
the
inquiry
may
instead
demand
a
contested
case
26
proceeding
to
decide
the
matter
under
the
Iowa
administrative
27
procedure
Act
(Code
chapter
17A).
In
any
case,
the
person
has
28
a
right
to
seek
judicial
review
of
the
attorney
general’s
final
29
decision.
If
the
attorney
general’s
final
decision
is
not
30
overruled,
the
attorney
general
must
include
the
name
of
the
31
dominant
retailer
on
a
list
posted
on
the
attorney
general’s
32
internet
site.
33
PROHIBITION
ON
VERTICAL
INTEGRATION
——
COMPLIANCE.
A
34
dominant
retailer
determined
to
be
engaged
in
vertical
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integration
must
submit
a
compliance
plan
to
the
attorney
1
general
specifying
how
the
dominant
retailer
will
comply
with
2
the
law,
including
by
divesting
an
interest
in
a
processor
or
3
relinquishing
an
interest
in
a
contract
with
a
producer.
The
4
attorney
general
may
apply
to
the
district
court
for
injunctive
5
relief
in
order
to
restrain
a
person
from
acting
in
violation
6
of
the
bill.
7
PROHIBITION
ON
VERTICAL
INTEGRATION
——
CIVIL
PENALTY.
8
A
person
who
violates
a
provision
of
the
bill
prohibiting
9
vertical
integration
is
subject
to
a
civil
penalty
of
$25,000.
10
Each
day
that
a
violation
continues
constitutes
a
separate
11
offense.
12
HEALTH
AND
SAFETY
PROGRAM.
The
bill
requires
DALS
to
13
establish
and
administer
a
program
for
a
processor
that
14
complies
with
fair
labor
practices.
A
participating
processor
15
may
be
awarded
financial
incentives
to
support
health
16
and
safety
practices
for
the
processor’s
employees.
The
17
department
must
implement
the
program
when
the
general
assembly
18
appropriates
moneys
required
to
support
its
administration.
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