This bill would amend SDCL 40-18-16 by increasing the maximum allowable inspection fee that the Brand Board could adopt for the ownership inspection of livestock.  The Brand Board sets the inspection fee by administrative rule after public hearing.  Currently, the maximum inspection fee the Board can adopt is 80 cents per head of livestock.  The Board has by administrative rule set the inspection fee at 80 cents, and lacks the statutory authority to increase the fee further. 

This amendment increase the maximum fee the Board could adopt if circumstances warranted.  The current fee could not be raised by the Board, however, without adopting a new administrative rule.  There are currently no plans to do so, but with the market conditions fostered by the continuing drought, cattle numbers could dwindle making it impossible to pay the expenses of the current ownership inspection program under the existing inspection fee.

 The amendment also proposes treating the ownership inspection of horses and mules differently from cattle.  Currently the inspection program is loosing money on inspection of horses.  It is simply not economically feasible to drive into the country side to inspect one, or a small number of horses.  The result is that cattle producers are subsidizing the inspection of horses.  The Board seeks to find a level where horse owners are carrying their own weight in terms of inspection costs.

 This bill proposes raising the maximum inspection fee allowable for cattle and buffalo from 80 cents per head to $1.00 per head.  For horses and mules, however, the maximum would be raised from a maximum of 80 cents per head to $10.00 per head.  It is the Board’s intent to adopt a sliding scale for the inspection of horses and mules by administrative rule.  For example, the inspection fee for inspecting up to 10 horses could be set at $10.00 per head, at $5.00 per head for the next 5 horses, and at the regular inspection rate for everything over 15 head inspected.  Public hearings would be held on the rules and would allow for industry input on the appropriate scale to adopt.

This bill amends SDCL 40-21-10 and SDCL 40-21-11 to clarify that those statutes apply not only when livestock are being inspected for purposes of sale, but also if the livestock are inspected because they are being transported outside the livestock ownership inspection area for other purposes like grazing or feeding.

 The bill would also add a new section to chapter 40-21 which provides that if the person transporting livestock out of the inspection area does not establish ownership in accordance with SDCL 40-21-10 and SDCL 40-21-11, then the brand inspector may hold the livestock in question, even if the inspection takes place outside of a livestock market.  The bill would make it a class 1 misdemeanor for someone to remove the livestock from the ownership inspection area or sell the livestock before the board has cleared the hold for release.

 SDCL 40-21-12 already covers what happens when a seller fails to establish ownership in accordance with SDCL 40-21-10 and SDCL 40-21-11.

Certain livestock auction markets and inspection points located outside the livestock ownership inspection area have been designated by the Brand Board as open markets.  This allows livestock owners to leave the ownership inspection area without an ownership inspection.  The livestock are inspected at the open market instead.  These open markets are located both in eastern South Dakota and in other states.

 For markets in eastern South Dakota, brand inspectors are provided by the nonprofit corporation that contracts with the Board to carry out the inspection program, and the contractor enters into written agreements with the markets.  For markets in other states, the Brand Board enters into reciprocal Agreements with the brand inspection agency in those states to perform the ownership inspection and there is no agreement between the Board and the livestock market.

 This bill would amend SDCL 40-21-5 to provide for written agreements between the Brand Board and those livestock markets it designates as open markets whether the markets are located in eastern South Dakota or in another state.  Execution of and compliance with an open market agreement would become a prerequisite to getting and retaining open market status.  The agreement would among other things require the market to abide by the inspection laws of this state and the state where they are located.  Likely terms would also include compliance with the federal Packers and Stockyards Act.

 Currently the Board may only revoke an open market designation if the market does not inspect the threshold level of livestock annually, does not have adequate facilities, does not comply with South Dakota law, or if it is no longer economically feasible to have an open market at the facilities in terms of inspection costs.  The Board may not revoke an open market for violating the laws of the state in which it is located, for failure to cooperate with the brand inspectors from that state, or for failing to insure its South Dakota consignors possess appropriate inspection paperwork.  This has created problems in terms of cooperation by out of state markets.  It also results in holding the in state markets to higher standards than out of state markets.  An open market agreement would create an even playing field for both in state and out of state open markets, and would result in better compliance with the state’s ownership inspection laws.

This bill would allow the Brand Board to impose civil penalties not to exceed $5,000 for violation of the brand laws.  The civil penalty could be imposed independently of any criminal charges for violating the brand laws.  A contested case hearing would be held before the Brand Board to determine whether there had in fact been a violation.  The Brand Board would hear evidence from both sides and issue a decision.  If after hearing the evidence the Board decided there was a violation, the Board would determine the amount of the civil penalty.

 The Board believes that the adoption of this bill would enhance compliance with state brand laws.  The Board believes that in some cases the threat of a misdemeanor conviction, with a fine of a couple of hundred dollars, is not sufficient deterrent for some people.  They are willing to risk getting caught violating the laws because the practical consequences of getting caught are small.  It is the Board’s view that such violators would be less willing to risk a civil fine of several thousand dollars.

 In setting the amount of the penalty the Board could consider factors like the number of head of livestock involved in the violation, the circumstances surrounding the violation, whether the person committing the violation had a history of violations, whether the person had in good faith attempted to comply with the law, and such other factors as the Board determines justice may require.  All penalties collected would be deposited in the livestock ownership inspection and theft prevention fund.

 The person upon whom a civil penalty is imposed may appeal the Board’s decision to circuit court in the same manner as other contested cases.  The penalty would be sought only for violation of the brand laws.  It is not intended to be utilized where there are questions concerning performance of the inspection by a brand inspector unless the statutes specifically prohibit the conduct at issue, i.e. inspecting your own livestock.

 This bill was patterned after a similar provision applicable to the Public Utilities Commission.  SDCL 49-31-94.

SDCL 40-20-4 currently makes it a class one misdemeanor to

 1) remove livestock from the livestock ownership inspection area
or
2) authorize the removal of livestock from any point within the livestock ownership inspection area to any point within one mile of the border with a destination outside the ownership inspection area

 unless the livestock have first been inspected for ownership and unless the shipper possesses the local inspection certificate, market clearance, shippers permit, or such other form of authorization as may be required by the board.  A class one misdemeanor is punishable by a county jail term not to exceed 1 year, a fine not to exceed $2,000 or both.

 This bill would make it a class 2 misdemeanor instead.  A class 2 misdemeanor is punishable by a county jail term not to exceed thirty days, a fine not to exceed $500, or both.  The reason for suggesting the change to a lesser criminal sanction is practical in nature.

 If a law enforcement officer decides to charge someone with a class one misdemeanor, the person needs to be arrested, taken into custody, and taken in for booking.  This creates problems when our law enforcement officers are running road checks and find someone leaving or about to leave the ownership inspection area without proper authorization from the Board.  It effectively requires the law enforcement officer to take the suspect to the nearest police stationed to be booked.  That can take quite some time and obviously creates problems in continuing with the road check.

A class 2 misdemeanor, on the other hand, allows the officer to simply issue a citation without the need to take the suspect into custody.  Since most of the brand law violations found at a road check involve someone lacking the proper Board authorization to leave the ownership inspection area, it makes practical sense for our law enforcement officers to be able to issue citations in those circumstances rather than take the suspect into custody.

(Pierre, SD) - All livestock brands registered in South Dakota are being renewed for a five year period.  The Brand Board office mailed out 25,801 renewal notices to brand owners on January 1, 2005.  16,521 registered brands have been renewed with the Brand Board office in Pierre as of March 18, 2005. 

Brand Board Director Julie Kongslien asks any brand owner who has not received a notice to contact the office immediately.   Kongslien reported that due to 911 address changes and the people moving, there were several thousand renewal notices returned to their office.  "We want to make sure everyone who has a registered brand receives their notice" stated Kongslien.

The brand renewal period began January 1 and ends May 1, 2005.  Any brands that are not renewed by May 1st will be cancelled.  When a brand cancels only the previous owner can re-record that brand for a period of two years.  To re-record a brand the owners must apply for the brand and pay a $125.00 re-registration fee.  If the brand is found to be too similar to another brand which is registered, the brand will not be re-registered.