S T A T E O F N E W Y O R K
________________________________________________________________________
7763
I N S E N A T E
May 6, 2010
___________
Introduced by Sen. AUBERTINE -- read twice and ordered printed, and when
printed to be committed to the Committee on Agriculture
AN ACT to amend the agriculture and markets law, in relation to orders
fixing milk and marketing agreements
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. Section 258-m of the agriculture and markets law, as added
by chapter 383 of the laws of 1937, subdivisions 1, 4 and the opening
paragraph of subdivision 6 as amended by chapter 679 of the laws of
2002, subdivision 2 as amended by chapter 935 of the laws of 1971,
subdivisions 6 and 11 as amended by chapter 309 of the laws of 1999,
subdivision 9 as amended and subdivision 12 as renumbered by chapter 696
of the laws of 1940 and subdivision 10 as amended by chapter 169 of the
laws of 1994, is amended to read as follows:
S 258-m. Orders fixing prices for milk and marketing agreements. 1.
[Upon] THE COMMISSIONER SHALL, AFTER MAKING A DETERMINATION, OR UPON the
petition of [a producers' bargaining agency of the production area
supplying a marketing area, such agency representing] at least thirty-
five per centum of the producers of milk [therein, alleging the exist-
ence of] THAT conditions so affecting the orderly marketing of milk in
such area that public interest requires regulation of prices of milk in
such area and equalization of the burden of surplus milk and expense of
handling it, and sharing the benefits of the fluid market in order that
the public policy declared in section two hundred fifty-eight-k of this
[chapter] ARTICLE shall be effective, [and upon the written request of
the petitioner, the commissioner shall] AND SHALL HAVE THE AUTHORITY TO
set, without a hearing, an interim price for class I fluid milk, and may
set an interim price for class II and/or III milk. In determining such
interim price, the commissioner shall take into consideration, among
other factors: (a) the prices being paid to producers; (b) the costs of
production to producers; (c) any changes in the ratio of index of prices
received for milk to index of prices paid by dairy farmers; (d) the
level of prices paid to producers in adjoining markets; and (e) the
interests of the general public. [Such] WHEN THE INTERIM PRICE IS SET IN
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD16787-01-0
S. 7763 2
RESPONSE TO A PETITION BY PRODUCERS OF MILK, SUCH interim price shall be
set within five days of such [written request] PETITION and to the
extent practicable apply to any milk purchased on or after the first day
of the month following [such] THE COMMISSIONER'S determination. Such
[interim price shall be in effect until the final determination regard-
ing the petition is made pursuant to the provisions of this article and
is enforceable and effectuated, provided however, such] interim price
shall be in effect for [no longer] NOT MORE than [one hundred eighty]
NINETY consecutive calendar days. During such time when the interim
price is in effect, the commissioner shall provide for and enforce a
mechanism for compensatory payments and have the authority to establish
and administer an equalization pool throughout the entire state or any
part thereof. Such interim price shall be reviewable by a person
aggrieved in a proceeding pursuant to article seventy-eight of the civil
practice law and rules. The effectiveness or enforcement of such interim
price regulation shall not be restrained, stayed, or enjoined pendente
lite. [In addition, it shall be the duty of] WITHIN FIFTEEN DAYS OF
SETTING THE INTERIM PRICE the commissioner [to] SHALL call a public
hearing for the consideration of said [petition] PRICE and [to] give
notice [thereof] OF by advertising [such call] in [such] A newspaper or
newspapers of general circulation in such marketing area as the commis-
sioner deems advisable. Such notice shall specify a time and a place
within the marketing area at which the hearing will be held and at which
the [applicants] PETITIONERS and other persons, including producers,
distributors and consumers and associations thereof, may be heard. In
not more than fifteen days upon receiving the petition the commissioner
shall set the hearing date in accordance with the above provisions. Such
hearing shall commence in not less than fifteen days but not more than
twenty days of the notice specifying the date and time of the hearing.
Such hearing shall conclude within fifteen days of commencement,
provided however, if the commissioner determines in writing that the
hearing has been conducted with due diligence but an extension is neces-
sary to accord due process, he or she may extend the hearing for a peri-
od not to exceed ten days. If after such hearing the commissioner shall
find, upon the record of the proceeding that conditions referred to in
section two hundred fifty-eight-k of this [chapter] ARTICLE exist so
affecting the orderly marketing of milk in such area, that public inter-
est requires that the public policy declared in section two hundred
fifty-eight-k of this [chapter] ARTICLE shall be effective and that it
is necessary that prices for milk to producers and associations of
producers be fixed by the commissioner, as expressed by section two
hundred fifty-eight-k of this [chapter] ARTICLE, and that it is favored
by at least [sixty-six and two-thirds] FIFTY-ONE per centum of the
producers of milk produced in the production area for said marketing
area voting, [individually or through cooperatives,] in the referendum,
the commissioner may by order fix and determine for such marketing area
fair and equitable minimum prices to be paid to producers. The determi-
nation of the commissioner as to whether or not by order to fix and
determine minimum prices shall be made within forty days after such
hearing, effective on the first day of the month following the determi-
nation. If the commissioner determines not to fix and determine minimum
prices, he shall state his reasons in writing and transmit same to the
petitioner, the governor, the temporary president of the senate and the
speaker of the assembly. Such price fixing order or orders shall be
rescinded effective at the end of the current month after a public hear-
ing whenever the commissioner shall find either that such conditions
S. 7763 3
have ceased to exist or that such termination is favored by at least
[thirty-five] FIFTY-ONE per centum of the producers of milk handled
within such market. For purposes of this subdivision, unless otherwise
specified, days shall mean business days.
2. [The commissioner may, from time to time upon like petition, during
the existence of such conditions revise the prices so fixed, after hold-
ing a hearing thereon. Whenever as herein provided a producers' bargain-
ing agency of a production area supplying a marketing area shall file a
petition and/or amended petition praying for any relief provided in this
article, it shall be lawful for a distributors' agency of such marketing
area to file a petition and/or amended petition providing for the
consideration of issues therein raised relative to the petition and/or
amended petition of the producers' bargaining agency, or to an existing
milk marketing order. Upon receipt of any such petition of a producers'
bargaining agency for any such marketing area, the commissioner shall
mail a copy thereof to the secretary of the distributors' bargaining
agency for such marketing area, if any, which meets the qualifications
set forth in the last sentence of this paragraph. If such distributors'
bargaining agency files either a petition or an amended petition with
the commissioner or notifies the commissioner that no such petition will
be filed, the commissioner may proceed to give notice of hearing as
provided in subdivision one of this section; otherwise the commissioner
shall defer the giving of such notice of hearing for a period of ten
days after such distributors' bargaining agency has received from the
commissioner a copy of the petition and/or amended petition of the
producers' bargaining agency. The commissioner shall mail a copy of the
distributors' bargaining agency petition to the secretary of the produc-
ers' bargaining agency and shall give such notice of such petition by
publication or otherwise as the commissioner deems advisable. Evidence
upon the proposals set forth in both the producers' and distributors'
bargaining agency petitions shall be received at the same hearing. The
commissioner shall not be required to furnish a copy of any petition of
a producers' bargaining agency to a distributors' bargaining agency nor
shall such distributors' bargaining agency be entitled to file a peti-
tion and to be heard as herein provided unless within the calendar year
preceding the filing with the commissioner of the producers' bargaining
agency petition such distributors' bargaining agency shall have filed
with the commissioner a list of its distributor members and the names
and addresses of its officers and unless such distributors' bargaining
agency represents not less than sixty per centum of the quantity of milk
distributed in such marketing area, exclusive of that distributed by
cooperative corporations, as determined by the reports submitted to the
commissioner during the preceding license year.
The provisions of this subdivision relative to distributors' bargain-
ing agency petitions shall not apply to any milk marketing area or
order, jointly administered by the commissioner and any officer or agen-
cy of the United States or of any other state.
3.] Before fixing any prices [pursuant to the provisions of the two
preceding paragraphs,] the commissioner shall investigate what are
reasonable costs and charges for producing, hauling, handling, process-
ing and/or other services performed in respect of milk and what prices
for milk in the market or markets affected by such prices and under
varying conditions will be most in the public interest. The commissioner
shall take into consideration the balance between production and
consumption of milk, the cost of production and distribution, including
compliance with all sanitary regulations in force in the market or
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markets affected, the cost of feeding stuffs used in the production of
milk, the supply of milk in such market and the purchasing power and
welfare of the public. The commissioner shall fix prices to producers on
the basis of the use thereof in the various classes, grades and forms.
Any prices fixed or approved by the commissioner shall be deemed to be
prima facie reasonable.
[4. In determining the approval or request for an order as herein
provided or the termination thereof on the part of producers the commis-
sioner shall consider the approval, request or favor in respect thereto
by any bona fide cooperative association of producers engaged in market-
ing milk within such marketing area as the approval, request or favor
either of making an order or of termination thereof of the producers who
are under contract with such cooperative association of producers.]
3. The commissioner shall appoint a referendum advisory committee to
assist and advise him in the conduct of the referendum. Such committee
shall review referendum procedures and the tabulation of results, and
shall advise the commissioner of its findings. A record of the commit-
tee's advice, recommendations and findings shall be kept and made avail-
able to any person upon request. The final certification of the referen-
dum results shall be made by the commissioner. The committee shall
consist of three members. One member shall be appointed from at least
three nominations of producers submitted by the producers bargaining
agency, one shall be an independent producer, and one shall be appointed
from at least three nominations of producers submitted by any general
farm organization. The members of the committee shall not receive a
salary but shall be entitled to actual and reasonable expenses in the
performance of their duties.
[5.] 4. Marketing agreements. It shall be lawful for a producers'
bargaining agency of the production area supplying a marketing area and
a distributors' bargaining agency for such marketing area to enter into
marketing agreements as to the prices to be paid by distributors to
producers for milk sold or otherwise utilized in said marketing area, as
to rules and regulations covering the method of determining the propor-
tion of the product of the entire dairy herd of a producer which shall
be accepted and paid for pursuant to such price or prices, as to reason-
able trade practices affecting the relations between producers and
distributors in such market. Such agreement may also contain provisions
for a committee to administer the provisions of said marketing agree-
ment. No agreement, however, shall be effective until a copy thereof
signed by all persons parties thereto shall have been filed with the
commissioner.
If the commissioner shall have reason to believe that any such market-
ing agreement results in a monopoly or restraint of trade to such an
extent that the price of milk is unduly enhanced by reason thereof, he
shall serve upon the parties to such agreement a complaint stating his
charge in that respect, to which complaint shall be attached or
contained therein a notice of hearing specifying a date and place, not
less than thirty days after the service thereof, requiring the parties
to such marketing agreement to show cause why an order should not be
made directing them to cease and desist from such monopolization or
restraint of trade. The parties so complained of may at the time and
place so fixed show cause why such order should not be entered. The
evidence given at such a hearing shall be taken under such rules and
regulations as the commissioner shall prescribe, reduced to writing and
made a part of the record therein. If upon such hearing the commissioner
shall be of the opinion that such marketing agreement results in monopo-
S. 7763 5
ly or restraint of trade to such an extent that the price of milk in the
marketing area affected by such agreement is unduly enhanced, he shall
issue and cause to be served upon the parties to said agreement an order
reciting the facts found by him and directing them to cease and desist
from such undue enhancement of prices. If such order is not obeyed by
the parties to such agreement, the commissioner shall file with the
attorney-general a certified copy of the order, evidence of such disobe-
dience and all of the records in the proceeding, and the attorney-gener-
al may apply to the supreme court for an order or decree affirming,
modifying or setting aside such order or for making such other order or
decree as the court may deem equitable in the premises.
Upon application of the parties to said marketing agreement and after
a hearing, as provided in subdivision one of this section, the commis-
sioner may by order make the provisions of said marketing agreement,
relative to prices to producers and other provisions thereof, effective
as to all producers, distributors and handlers in said market notwith-
standing that they may not have approved of said agreement if he shall
find that the terms and conditions of said agreement are fair, equitable
and in public interest, that the agreement has been fairly entered into
without fraud, that public interest so requires, in order to effectuate
the declaration of policy contained in section two hundred fifty-eight-k
of this [chapter] ARTICLE, that the proportion of the producers and
distributors who have executed such agreement or shall have approved
same upon the hearing is equal to that required for an order under
subdivision one of this section, and further provided that the commis-
sioner shall determine that the prices set forth in said marketing
agreement are reasonable and proper prices, as required by this section
for prices fixed by an order of the commissioner. Any order so issued
shall terminate effective on the last day of the current month, and in
the same manner and upon the same request after a hearing, as provided
for the termination of an order in subdivision one of this section.
[6.] 5. If approved by [sixty-six and two-thirds] FIFTY-ONE per centum
of the producers affected voting [individually or through their cooper-
ative] in the referendum, any order or marketing agreement fixing the
price to producers under either subdivision one or subdivision [five]
FOUR of this section for market or markets, may provide for an equaliza-
tion of prices to all producers of the production area of the market
affected so that each producer or co-operative association shall receive
the same base price for all milk delivered subject to reasonable differ-
entials for quality and location and for services. Any such order may
contain provisions requiring from persons who bring milk or cream into
the marketing area regulated by such order payments on all such milk or
cream whenever such persons are not otherwise regulated by the order.
In order to effect such equalization of prices to producers the
commissioner shall require a monthly report from each dealer receiving
milk from producers for such market showing the disposition of all milk
handled by the reporting dealer in such market and shall thereafter
require payment by each dealer, to a trust company designated as a
fiscal agent by the commissioner, of any amount by which the sum other-
wise due by such dealer to its producers in accordance with the prices
fixed by such order exceeds the equalized base price as determined by
the commissioner from such reports, which amounts so paid to said fiscal
agent, the commissioner shall direct it to pay to those dealers whose
reports show that the base prices they will pay their producers in
accordance with such order are less than the equalized base price as so
determined by the commissioner, for repayment in turn by such dealers to
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their producers so as to bring all lower rates of payment up to the
equalized base price. Such payments to said fiscal agents shall not be
deemed to be state funds. Such equalization shall include milk of all
grades and produced by all breeds of cows, and may include milk,
approved by a board or boards of health having jurisdiction in a market-
ing area designated in an order under this section, which was produced
by a dealer.
The provisions of this subdivision shall not become operative as to
the New York state metropolitan market production area, however, until
pursuant to federal or state statutes, or by action of authorities duly
constituted and authorized thereunder, prices to producers are so equal-
ized and made effective throughout all the production area of the New
York state metropolitan market area.
[7.] 6. After the commissioner shall have fixed prices in any area or
approved prices in a marketing agreement to be charged or paid for milk
in any form included in the definition of milk as used in this article
whether by class, grade or use, it shall be unlawful for a milk dealer
to buy or offer to buy milk at any price less than such price or prices
as shall be applicable to the particular transaction, and no method or
device shall be lawful whereby milk is bought or sold or offered to be
bought or sold at a price less than such price, or prices, as shall be
applicable to the particular transaction, whether by a discount or
rebate, or free service, or advertising allowance, or a combined price
for such milk together with another commodity or commodities, or service
or services, which is less than the aggregate of the prices for the milk
and the price or prices for such other commodity or commodities, or
service or services, when sold or offered for sale separately or other-
wise.
[8.] 7. It is the intent of the legislature that the instant, whenever
that may be, that the handling within the state by a milk dealer of milk
produced outside of the state becomes a subject of regulation by the
state, in the exercise of its police powers, the restrictions set forth
in this article respecting such milk so produced shall apply and the
powers conferred by this article shall attach.
[9.] 8. No marketing agreement or order shall prevent a cooperative
association from blending as heretofore the proceeds of all sales and
distributing to its producers the resultant blended price subject to
deductions and differentials as provided by its contracts with its
producers, but no such cooperative association shall sell milk at prices
lower than the prices fixed by the commissioner in an order for the
markets affected.
[10.] 9. Any marketing agreement or order of the commissioner may
provide for necessary deductions from payments to producers to cover the
cost of administering such marketing agreement or order, including the
cost of auditing milk dealers' classifications, and the cost of other
services to producers. The funds so derived from such deductions shall
be deposited in an account within the miscellaneous special revenue fund
and shall not be deemed to be state funds. The commissioner may, in his
or her discretion, appoint an administrator and such assistant adminis-
trators as in his or her opinion may be necessary to administer the
terms of any agreement or order, and the persons so appointed shall be
deemed to occupy positions confidential to the commissioner and may be
appointed without competitive examination. All other persons employed by
the commissioner in the administration of such a marketing agreement or
order shall be selected in accordance with the civil service law and
rules.
S. 7763 7
[11.] 10. Any marketing agreement or order of the commissioner may
provide (a) for payments to cooperative associations of producers in
cases where the commissioner finds that such associations are actually
rendering marketing services to producers under contract with them,
which services enure to the benefit of all producers in the market or to
the benefit of the market as a whole and may include the conduct and
maintenance, jointly with other cooperative associations, of plans or
campaigns, by advertisement or otherwise, including participation in
similar regional or national plans or campaigns, to promote the
increased consumption of milk and milk products, to acquaint the public
with the dietary advantages of milk and milk products and with the econ-
omy in the diet, and to command, for milk and dairy products, consumer
attention consistent with their importance and value, or that such asso-
ciations are rendering services in the control and disposition of
surplus for the benefit of the market; (b) for payment to milk dealers
or to cooperative associations of producers which operate milk receiving
stations or manufacturing plants for services rendered by them, in the
stabilizing of the supply of fluid milk and cream within the market at
times either of surplus or of shortage of milk; and (c) for adjustments
in payments to producers to effect a more favorable seasonal balance as
between the production and consumption of milk. Such adjustments may be
made in the form of deductions and additions to the fund to equalize
prices of milk to producers, or by apportioning among producers the
total value of all milk subject to equalization on the basis of their
marketings of milk during a representative period of time. Any such
deductions from the fund to equalize prices shall not be deemed to be
state funds. Such moneys shall be held in reserve and used solely for
additions to the fund to equalize prices, in such manner as the order
may provide. The commissioner shall make no provision for adjustment in
payments under this section with respect to a state milk marketing
order, except on the petition of a producers' bargaining agency of a
production area supplying a marketing area and after a public hearing
and subsequent producer approval as required by this section.
[12.] 11. "Distributor" as used in this and the preceding section
means a milk dealer as defined in this article who delivers milk to
stores and/or consumers within the marketing area, from a milk depot or
milk plant owned and/or operated by such dealer.
S 2. This act shall take effect immediately.
