S T A T E O F N E W Y O R K
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6714
2021-2022 Regular Sessions
I N S E N A T E
May 12, 2021
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Introduced by Sen. HINCHEY -- (at request of the Department of Agricul-
ture and Markets) -- 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 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
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(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
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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
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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.
