BILL NUMBER: S8243

SPONSOR: HINCHEY
 
TITLE OF BILL:

An act to amend the agriculture and markets law, in relation to the
suspension of collection of the produce security fund

 
PURPOSE

The purpose of this bill is to increase the Producer Security Fund
license fee collection cap from $4 million to $6 million to provide the
same level of security to producers as provided by the current statutory
cap when adjusted for inflation. It would also grant the Department of
Agriculture and Markets (Department) the authority to continue collect-
ing security fund licensing fees in the event the proposed cap of $6
million is reached in order to provide, when adjusted for inflation, the
same level of protection intended by the Legislature.

 
SUMMARY OF PROVISIONS

This bill would amend Ag. & Mkt. Law § 250(f) to: (1) increase the
              

Producer Security Fund fee collection threshold from $4 million to $6
million before license fees are suspended; and (2) grant the Department
the authority to continue collecting security fund fees for any given
year in the event that the amount contained in the fund exceeds $6
million, but does not provide the same level of protection as provided
in the statute when adjusted for inflation.

 
JUSTIFICATION

The purpose of the law, enacted in 1996, is to ensure that New York
State farmers are paid fully and promptly in the event a dealer defaults
in payment; and to prevent any unfair and fraudulent marketing prac-
tices. The amount in the Security Fund is approaching $4 million, howev-
er, when adjusted for inflation, the value of the security fund has been
reduced to $2 million dollars. To provide the same level of security
intended by the Legislature, the fund level before collection of fees
would be suspended would need to reach $8 million. The proposed amend-
ment maintains the same level of security for farmers that sell to
licensed distributors provided in the original law when adjusted for
inflation. It does not increase licensing fees, or the maximum security
(bond) required of dealers so it does not impact the regulated communi-
ty.

 
PRIOR LEGISLATIVE HISTORY

This proposal has not been submitted previously.

 
FISCAL IMPLICATIONS

No known fiscal implications.

 
EFFECTIVE DATE
This act shall take effect immediately.