S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   7481
 
                        2021-2022 Regular Sessions
 
                           I N  A S S E M B L Y
 
                               May 10, 2021
                                ___________
 
 Introduced  by  M. of A. JONES -- (at request of the Department of Agri-
   culture and Markets) -- read once and referred  to  the  Committee  on
   Agriculture
 
 AN  ACT  to amend the agriculture and markets law, in relation to import
   of dairy products and payment from the milk producers security fund

   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Subdivision  1  of  section  71-n  of the agriculture and
 markets law, as amended by chapter 389 of the laws of 1994,  is  amended
 to read as follows:
   1.  (a) No person, firm, association, partnership or corporation shall
 engage in or carry on the business of shipping, transporting or  import-
 ing  into  this state from any other state, territory or foreign country
 any milk or milk products, as defined  in  subdivision  two  of  section
 seventy-one-l  of  this  article,  for  sale,  resale or distribution to
 consumers [without first having obtained from the commissioner a  permit
 authorizing  all such shipments, transportations or importations] UNLESS
 THE MILK AND MILK PRODUCTS TO BE SHIPPED, TRANSPORTED, OR IMPORTED  INTO
 THIS  STATE MEET ALL OF THE SANITARY REQUIREMENTS AND STANDARDS FOR SUCH
 MILK AND MILK PRODUCTS PRODUCED OR MANUFACTURED WITHIN THIS STATE.
   (b) [All such  permits  shall  expire  on  June  thirtieth  following;
 provided,  however, that before the commissioner shall issue such permit
 he or she shall (i) cause an inspection by a New York state inspector of
 the out-of-state producers' cows, barns,  stables,  milk  houses,  water
 supply, milk equipment, utensils and milk; (ii) require a veterinarian's
 certificate  showing  the  cows  to be in a healthy condition; and (iii)
 require the applicant or applicants for the permit to satisfy him or her
 that the milk or milk products to be shipped,  transported  or  imported
 into  the  state meet all of the sanitary requirements and standards for
 such milk and milk products produced within the state of New York.

  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD09951-01-1
              

 A. 7481                             2

   (c)] Nothing in this section shall be held or construed  to  apply  to
 evaporated  or  condensed milk manufactured, sold or exposed for sale or
 exchange in hermetically sealed cans.
   [(d)  The  commissioner  shall  not  issue  a permit for the shipment,
 transportation or importation into  this  state  of  any  milk  or  milk
 products, as defined in subdivision two of section seventy-one-l of this
 article,  for  sale,  resale  or distribution to consumers which fail to
 meet in detail in accordance  with  the  actual  inspection  hereinabove
 described,  all sanitary requirements, regulations and product standards
 now in  force  or  hereafter  promulgated  by  the  department  for  the
 production of milk or milk products within the state.]
   (C)  When the commissioner inspects a plant beyond the boundary of the
 state, the commissioner may require such plant to reimburse the  depart-
 ment  for  all necessary and reasonable expenses incurred in making such
 inspections. [In lieu of the inspection requirements set forth in  para-
 graph  (b)  of  this subdivision, the] THE commissioner is authorized to
 effectuate and enter into such reciprocal agreements  with  governmental
 units of other states, commonwealths or jurisdictions as will insure the
 inhabitants  of this state milk and milk products complying with all the
 sanitary requirements and product standards and regulations now in force
 or hereafter promulgated by the department for the production and handl-
 ing of milk or  milk  products  within  the  state,  through  reciprocal
 inspection  agreements,  and  in  aid of such agreements, may approve or
 accept inspections conducted by other commonwealths, states  and  juris-
 dictions with respect to milk and milk products.
   §  2.  Paragraph (a) of subdivision 5, paragraph (a) of subdivision 6,
 subdivision 7 and subdivision 9 of section 258-b of the agriculture  and
 markets law, paragraph (a) of subdivision 5 as amended by chapter 326 of
 the  laws  of 1988, paragraph (a) of subdivision 6 as amended by chapter
 506 of the laws of 2003, subdivision 7 as amended by chapter 167 of  the
 laws of 1995, and subdivision 9 as amended by chapter 540 of the laws of
 1987, are amended to read as follows:
   (a)  If  the  commissioner  has reason to believe that a licensed milk
 dealer who is participating in the  milk  producers  security  fund  has
 defaulted  in  making  payments  for milk to producers, the commissioner
 shall give reasonable notice to the producers believed to be affected to
 file verified claims and may fix a reasonable  time  within  which  such
 claims  must  be  filed. Upon learning of such default, the commissioner
 shall immediately examine the records of the defaulting dealer and shall
 identify the amounts which  are  reasonably  estimated  to  be  owed  to
 producers.  Within  [thirty]  SIXTY  days of the receipt of a claim by a
 producer and on the  basis  of  such  estimates,  the  commissioner  may
 authorize  the  comptroller  to pay any such producer up to seventy-five
 percent of such estimate. In connection with such payment,  the  commis-
 sioner  may make provisions for the recovery for the benefit of the fund
 of any payments made pursuant to this paragraph.
   (a) Each milk dealer who buys,  receives  or  otherwise  handles  milk
 received  from  producers  may  execute and file with the commissioner a
 surety bond in lieu of participation in the milk producers security fund
 and the filing of a surety bond or bonds pursuant to  subdivision  three
 of  this section. The bond shall be executed by a surety company author-
 ized to do business in this state and shall be approved by  the  commis-
 sioner.  The  bond  shall  be  conditioned for the prompt payment of all
 amounts due to producers for milk sold or consigned by them to such milk
 dealer during the license year and all amounts due to  the  equalization
 or producer settlement fund of any order promulgated by the commissioner

 A. 7481                             3
 
 pursuant  to  section  two  hundred  fifty-eight-m or two hundred fifty-
 eight-n of this article or to the equalization  or  producer  settlement
 fund  of  a  federal  milk marketing order. ADDITIONALLY, THE BOND SHALL
 MAKE  PROVISIONS  FOR AN ADVANCE PAYMENT PURSUANT TO SUBDIVISION NINE OF
 THIS SECTION.
   7. Alternative security. Each milk dealer buying milk  from  producers
 may in lieu of filing a surety bond pursuant to subdivision three or six
 of  this section provide an equal amount of protection for the producers
 from whom he or she purchases or receives milk by filing an  irrevocable
 letter or letters of credit for the account of the milk dealer authoriz-
 ing  the  commissioner  to  draw  on a bank or trust company or banks or
 trust companies authorized to do business in  the  state  of  New  York.
 Such  letter  or  letters shall contain such terms and conditions as the
 commissioner may require. ADDITIONALLY, THE IRREVOCABLE LETTER OF CREDIT
 SHALL MAKE PROVISIONS FOR AN ADVANCE  PAYMENT  PURSUANT  TO  SUBDIVISION
 NINE OF THIS SECTION.
   9.  Claims  against  bond or alternative security. Claims by producers
 against a dealer who had filed a bond or alternative security  shall  be
 processed  by  the  commissioner  in  the  same manner as is provided in
 subdivision five hereof with respect to  claims  against  the  producers
 security  fund and such claims shall be subject to the same limitations.
 UPON RECEIVING A CLAIM AGAINST A DEALER WHO HAD FILED A BOND OR ALTERNA-
 TIVE SECURITY, THE COMMISSIONER SHALL IMMEDIATELY EXAMINE THE RECORDS OF
 THE DEFAULTING DEALER AND SHALL IDENTIFY THE AMOUNTS WHICH  ARE  REASON-
 ABLY  ESTIMATED  TO  BE  OWED  TO  PRODUCERS.   WITHIN SIXTY DAYS OF THE
 RECEIPT OF A CLAIM, AND ON THE BASIS OF SUCH ESTIMATES, THE COMMISSIONER
 IS AUTHORIZED TO PAY ANY SUCH PRODUCER UP TO FIFTY PERCENT OF SUCH ESTI-
 MATE AND PROCEED TO OBTAIN FROM SUCH SECURITY THE FUNDS  WITH  WHICH  TO
 PAY  ANY  ADVANCES  ON  THE CLAIMS. IN CONNECTION WITH SUCH PAYMENT, THE
 COMMISSIONER SHALL MAKE PROVISIONS FOR THE RECOVERY OF ANY PAYMENTS MADE
 PURSUANT TO THIS SUBDIVISION. The commissioner's determination  certify-
 ing the amounts due claimants shall be subject to judicial review in the
 same manner and subject to the same limitations. In the case of a dealer
 who  has  filed  alternative security, the commissioner shall proceed to
 obtain from such security the funds with which to  pay  the  claims.  If
 recovery  upon  the  alternative  security  is not sufficient to pay all
 claims, the amount recovered shall be divided pro rata among  claimants.
 In  the  case  of a dealer who has filed a surety bond, the commissioner
 may bring an action on the bond, and for the purposes of such action his
 determination certifying the amounts due shall be  presumptive  evidence
 of  the  facts therein stated.   In the event that recovery on such bond
 has not been made within sixty days of the commissioner's  certification
 of the amounts due producers covered by the bond, the commissioner shall
 direct  the  comptroller  to pay such amounts to claimants from whatever
 monies are available in the milk producers security fund. In  the  event
 that  recovery  against  the  bond  has not been made within one hundred
 eighty days of certification of the  amounts  due  claimants,  each  and
 every  dealer  having  filed  a bond pursuant to subdivision six of this
 section shall pay monthly to the commissioner an amount  not  to  exceed
 one-half  of  one-tenth  of one percent of the average uniform price per
 hundredweight of milk for the previous calendar year, as  determined  by
 the  commissioner  on  or  before  the thirty-first day of March of each
 year, on each hundredweight of such milk purchased, received or handled.
 Such payments shall continue for such period of time as the commissioner
 deems necessary in order to return to the  fund,  no  later  than  three
 years  from the date of such payment therefrom, the total amount paid as

 A. 7481                             4
 
 a result of the default of  such  dealer  plus  interest,  at  the  rate
 provided  for  in  section  5-501  of the general obligations law on the
 amount of such payment from the date of such payment. In the event of  a
 recovery  on  the  bond  after  the  commencement  of such payments, the
 commissioners shall authorize the comptroller  to  pay  to  each  dealer
 making such payments its pro rata share of the amount by which the total
 of  such payments exceeds the difference between the amount received and
 the total amount paid to claimants.
   § 3. This act shall take effect on the sixtieth  day  after  it  shall
 have become a law.