Agriculture_Markets
Andrew M. Cuomo, Governor | Richard A. Ball, Commissioner
 
 

New York State Consolidated Laws

Agriculture & Markets

                               ARTICLE 21
                              Milk Control
Section  252.   Division of milk control.
    253.    Definitions.
    254.    General powers.
    254-a.  Milk marketing advisory council.
    255.    Rules and orders.
    256.    Entry, inspection and investigation.
    256-a.  Audits   of   books  and  accounts  of  milk  dealers  and
          cooperatives.
    256-b.  Accounting of milk dealers and cooperatives to  producers.
    257.    Licenses to milk dealers.
    257-a.  Transportation and storage of milk.
    258.    Application for license.
    258-a.  License fees.
    258-b.  Prompt  payment for milk purchases; security funds;  bonding
          of milk dealers.
    258-c.  Granting and revoking licenses.
    258-d.  Proceedings to review.
    258-e.  Violations; remedies.
    258-f.  Records.
    258-g.  Reports.
    258-j.  Construction, exceptions and limitations.
    258-k.  Declaration of policy.
    258-l.  Producers` bargaining agencies and distributors`  bargaining
          agencies.
    258-m.  Orders fixing prices for milk and marketing agreements.
    258-n.  Interstate and federal compacts.
    258-o.
    258-p.  Declaration of policy.
    258-q.  Action for a uniform northeast market.
    258-r.  Actions to eliminate trade barriers.

  Sec. 252.  Division of milk control.  There shall be in the department
a division to be known as the division of milk control.  The head of the
division  shall be a director who shall be appointed by the commissioner
and serve during his pleasure.  The functions, powers and duties of  the
department,  as  provided  by  this article, and by article four of this
chapter, shall be exercised and performed therein  by  and  through  the
division  of  milk  control.   The  commissioner may delegate any of his
powers to, or direct any of his duties to be performed by  the  director
of the division of milk control.

  S  253.   Definitions.   As  used  in  this  article  unless otherwise
expressly stated, or unless the  context  or  subject  matter  otherwise
requires:
  1.   "Division"  means  the  division  of milk control created by this
article.
  2.  "Director" means the director of the division of milk control.
  3.   "Person"  means  any  person,  firm, corporation, co-partnership,
association, co-operative  corporation  or  unincorporated  co-operative
association.
  4.   "Milk  dealer"  means  any person who purchases, handles or sells
milk, or bargains for the purchase or sale of  milk,  including  brokers
and  agents.      Each  corporation which if a natural person would be a
milk dealer within the meaning of this article, and any  subsidiary  and
affiliate  of such corporation similarly engaged, shall be deemed a milk
dealer within the meaning of this definition.   A  hotel  or  restaurant
which sells only milk consumed on the premises where sold, or a producer
who delivers milk only to a milk dealer, or a person who purchases  milk
from  licensed  dealers to be combined by him with non dairy products in
the manufacture of candy, soup or other food products (except melloream)
shall not be deemed a milk dealer.
  6.  "Licensee" means a licensed milk dealer.
  7.   "Milk",  for  the  purposes  of this article, means all skim milk
resulting from the separation of butterfat from whole milk, or resulting
from  reconstituting  or  recombining nonfat milk solids with water, and
all butterfat in the form of or contained  in  milk,  homogenized  milk,
vitamin   D   milk,   vitamin-mineral  fortified  milk,  flavored  milk,
standardized milk, concentrated milk in consumer  packages,  fluid  skim
milk,  modified  skim  milk,  skim milk drinks, buttermilk, fresh cream,
half and half, or any product or  products  having  the  appearance  and
taste  of  any  of  the  above, regardless of the name by which they are
labeled or represented.   It  includes  such  skim  milk  and  butterfat
contained in melloream whose appearance, odor or taste is similar to any
of the aforesaid.  In each instance where quantity is  referred  to  the
intent  is  to  include  the  combined  product  pounds of skim milk and
butterfat contained therein.
  8.  "Producer" means a person producing milk.
  9.  "Consumer" means any person other than a milk dealer who purchases
milk for fluid consumption.
  10.   "Store"  means  an  individual  business  establishment  at  one
location including a grocery store, hotel,  restaurant,  soda  fountain,
dairy  products  store, automatic milk vending machine, gasoline station
or a similar mercantile establishment offering goods and/or services  at
retail  to  individual consumers.  The commissioner may after due notice
and public hearing define as a store such other mercantile establishment
as he finds conforms to the definition as herein provided.
  11.   "Milk  broker"  means  any  person  who  buys and sells milk for
licensees on a fee or commission basis or who arranges for or negotiates
contracts to buy or sell milk among licensees.

  Sec. 254.  General powers.  The department through the commissioner is
hereby vested with the powers heretofore conferred with respect to  milk
gathering stations, manufactories and plants, including the following:
  (a)   To  supervise  and regulate the entire milk industry of New York
state, including the production, transportation,  manufacture,  storage,
distribution,  delivery  and sale of milk and milk products in the state
of New York; provided, however, that nothing contained in  this  article
shall  be construed to abrogate or affect the status, force or operation
of any provision of the public health law, the public service  law,  the
state sanitary code or any local health ordinance or regulation.
  (b)    To  investigate  all  matters  pertaining  to  the  production,
manufacture, storage, transportation, disposal, distribution and sale of
milk and milk products in the state of New York.  The commissioner shall
have the power to  subpoena  milk  dealers,  their  records,  books  and
accounts,  and  any other person from whom information may be desired to
carry out  the  purpose  and  intent  of  this  chapter  and  may  issue
commissions to take depositions of witnesses absent from the state.  Any
designated employee may sign and  issue  subpoenas  and  may  administer
oaths  to witnesses and conduct hearings and investigations.  A subpoena
issued under this section shall be regulated by the civil  practice  law
and rules.
  (c)   The  commissioner  may  act  as  mediator  and arbitrator in any
controversy or issue that may arise among or between producers, among or
between  producers  and  milk dealers, among or between milk dealers, as
between themselves or that may arise between them as groups.
  (d)   The  operation  and  effect  of  any  provision  of this article
conferring a general power shall not be impaired  or  qualified  by  the
granting by this article of a specific power or powers.

    Sec.  254-a.   Milk  marketing advisory council.  1.  There shall be
established a milk marketing advisory council to advise the commissioner
in  planning,  programs  and  policy  pertaining  to milk marketing. The
council will be convened at the request of  the  commissioner  not  less
than two times per year.
    2.   This  advisory  council  shall  consist  of not less than seven
members who shall be appointed by and  serve  at  the  pleasure  of  the
commissioner.   The  commissioner shall designate one member to serve as
chairman of the council.  The membership of the council  shall  include,
but  not  be limited to milk producers, milk dealers, representatives of
general farm organizations and dairy  farmer  cooperative  associations,
and  representatives  of  milk  consumers  and  representatives  of milk
retailers.  The  members  shall  serve  without  salary,  but  shall  be
entitled  to  reimbursement  of  their  ordinary  and  necessary  travel
expenses.
    3.   The  duties and responsibilities of the milk marketing advisory
council shall be prescribed by the commissioner and he may  specifically
delegate  to  the  council  any  or  all  of  the  following  duties and
responsibilities:
    (a)  The  recommendation  to  the commissioner of proposed rules and
regulations to effectuate the purposes of this article.
    (b)  The recommendation to the commissioner of changes or amendments
to rules and regulations.
    (c)  The recommendation to the commissioner of policy positions with
respect to proposed federal legislation and regulations  affecting  milk
marketing within the state.
    (d)  Assisting  the  commissioner  in the collection and assembly of
information and data necessary for the  proper  administration  of  this
article.
    (e) Study of milk marketing matters pertaining to the administration
of this article and inform the commissioner of their findings.
    (f)   The   performance   of  such  other  duties  relating  to  the
administration of this article as the commissioner shall designate.

  S  255.  Rules and orders.  The commissioner may adopt and enforce all
rules and all orders necessary to  carry  out  the  provisions  of  this
article.   Every  rule  or  order  shall  be  filed in the office of the
department of state, except an  order  directed  only  to  a  person  or
persons  named  therein  which shall be served by personal delivery of a
copy, or by mailing a copy in a sealed envelope with postage prepaid  to
each  person  to  whom  such  order  is  directed,  or, in the case of a
corporation, to any officer or agent of  the  corporation  upon  whom  a
summons  may  be  served  in accordance with the provisions of the civil
practice law and rules.  The filing of any rule and of  any  order,  not
herein  required to be served, in the office of the department of state,
shall constitute due and sufficient notice to all  persons  affected  by
such  rule or order.  A rule when duly filed as provided in this section
shall have the force and effect of law.

    Sec. 256.  Entry, inspection and investigation.  Any employee
designated for the purpose shall have access to and may enter  at
all  reasonable  hours  all  places  where  milk is being stored,
bottled or manufactured, or where milk or milk products are being
bought,  sold  or handled, or where the books, papers, records or
documents relating to such transactions are kept, and shall  have
power to inspect and copy the same in any place within the state,
and may administer oaths and take testimony for  the  purpose  of
ascertaining  facts which in the judgment of the commissioner are
necessary to administer this chapter.

    Sec. 256-a.  Audits of books and accounts of milk dealers and
cooperatives.  It shall  be  the  duty  of  the  commissioner  to
examine  and  audit  from time to time, as the commissioner deems
necessary and proper, the books and accounts of milk dealers  and
cooperatives  licensed  or subject to license under this article,
for the purpose of determining how payments to producers for  the
milk  handled  are computed, whether the amounts of such payments
are fair, and whether any provisions of  this  chapter  affecting
such  payments,  directly  or  indirectly, have been or are being
violated, and for the purpose of determining  the  costs  of  the
handling,  distribution  and marketing of milk and milk products,
and for the purpose of determining the manner of  disposition  of
the  total  income of each and every milk dealer and cooperative.
For  the  purposes  hereof,  the  commissioner  or  any  employee
designated for that purpose shall have access to and may enter at
all reasonable hours all  places  where  milk  is  being  stored,
bottled or manufactured or where milk and milk products are being
bought, sold or handled, and  where  books,  papers,  records  or
documents  relating  to such purchase or sale are kept, and shall
have power to inspect and copy and audit all of  said  books  and
accounts.   No  person  or corporation shall in any way hinder or
delay  the  commissioner  or  any  employee  in  conducting  such
examination  or  audit.   The  commissioner may reveal any of the
findings of such examination or audit to the producers interested
therein,  or  may publish all or any part of such findings, as in
his judgment will best serve the public interest  and  accomplish
the purposes of this chapter.

  S 256-b. Accounting of milk dealers and cooperatives to producers. 1. For
purposes of this section, any corporation or association of persons engaged
in  the  production  of  agricultural products and operating for the mutual
benefit  of  its  members  in  conformity  with  the  requirements  of  the
Capper-Volstead   Act,   and   any   federation  of  such  corporations  or
associations, shall be deemed to be a cooperative.
   2.  Every  milk dealer and cooperative, subject to license or regulation
under this article, in making  payments  to  producers  for  milk  sold  or
delivered  to  such dealer or cooperative, shall clearly set forth the unit
price for such milk, whether determined pursuant to federal or state market
order  or  pursuant to agreement, together with the amount of all premiums,
subsidies or differentials, all deductions, service fees, hauling  charges,
supply  expenses,  costs or adjustments of any nature whatsoever, in such a
manner as to fully disclose to the producer the rate, basis and  manner  of
computing such payment.
  3.  Each  cooperative  subject  to license or regulation pursuant to this
article shall, prior to its annual meeting, mail or  personally  deliver  a
copy  of  a  written  report  of  audit,  prepared  in  the form and manner
prescribed under section seventy-five of the cooperative corporations  law,
to each member of the cooperative and to individual producer members of any
constituent cooperatives. The printing of  such  report  in  a  publication
regularly  distributed to the cooperative`s entire membership shall satisfy
the delivery requirement.
   4.  Each  milk producer who applies for membership in such a cooperative
shall, prior to issuance of a membership certificate or entry into  a  milk
marketing  agreement  with  the cooperative, be provided with the following
documents of such cooperative and of  any  federation  of  cooperatives  of
which  it  is  a  member: (a) a copy of the cooperative`s written report of
audit required to be provided to the cooperative`s membership, pursuant  to
subdivision  three  of this section, for the fiscal year preceding the date
of such application;  (b) a copy of the certificate of incorporation; (c) a
copy of the bylaws in effect at the time of such producer`s application for
membership; and (d) a written statement of the current equity  requirements
and policy on the allocation of net margins and losses.
  5.  The commissioner may make or permit disclosure of a written report of
audit  made  pursuant  to  subdivision  three  of  this  section  for   any
cooperative subject to license or regulation pursuant to this article.
  6.  The  commissioner  may  promulgate rules and regulations necessary to
assure such uniform requirements as will carry out the provisions  of  this
section.

  S  257.  Licenses to milk dealers. 1.  No milk dealer shall buy milk from
producers or others or deal in, handle, sell or distribute milk unless such
dealer  be duly licensed as provided in this article.  It shall be unlawful
for a milk dealer to buy milk from or sell milk to a  milk  dealer  who  is
unlicensed,  or  in  any  way deal in or handle milk which he has reason to
believe has previously been  dealt  in  or  handled  in  violation  of  the
provisions of this chapter.
  2.   The  commissioner  may  by  official  order  exempt from the license
requirements provided by this article, milk dealers who purchase or  handle
milk  in a total quantity not exceeding three thousand pounds in any month,
and/or milk dealers selling milk in any quantity in markets of one thousand
population or less.
  3.   A  store  shall  be exempt from the license requirements provided by
this article if such store does not engage in the customary functions of  a
milk dealer and meets all the following conditions:
  (a)   Sells  no  milk  other  than that purchased or received from a duly
licensed milk dealer, or a milk dealer exempted by official  order  of  the
commissioner from the license requirements of this article.
  (b)  Does not operate a milk pasteurizing plant.
  (c)   Delivers  no  milk  to  hotels,  restaurants,  lunch counters, soda
fountains, or any eating establishment to be consumed on the premises.
  (d)   Sells  not more than three thousand pounds of milk in any month for
off-premises delivery.
  (e)   Does  not  deliver  or  transport  or  cause  to  be  delivered  or
transported milk to a store or stores, except milk delivered to such  store
by a licensed milk dealer or milk dealers.
  (f)  Does not sell milk to other stores.
  (g)   Does  not  purchase,  buy,  sell  or  deal  in  milk  received from
unlicensed dealers.
  4.  Farmers (including individuals and partnerships but not corporations)
selling not more than one hundred quarts daily  average  of  milk,  or  any
amount  of milk pasteurized on the farm where produced, to customers coming
there for it shall be exempt from the license requirements provided by this
article.

  S 257-a. Transportation and storage of milk. 1. Any vehicle transport-
ing  pasteurized  milk  for  retail  sale in the same container shall be
transported in a vehicle capable of maintaining milk at a temperature of
at least forty-five degrees fahrenheit or cooler.
  2. It shall be unlawful for milk excluding UHT/aseptic  packaged  milk
and milk products to be shipped or stored in the same enclosed refriger-
ated  compartment  which  contains  any hazardous or toxic chemicals, or
solid waste.   "Toxic and hazardous chemicals"  shall  not  mean  common
household  products  normally sold in grocery stores and supermarkets or
those products normally provided to commercial establishments by a  food
service  company, that are packaged and handled in a manner which avoids
contamination of milk or milk products. "Solid waste" shall not mean any
packaging that is approved for reuse such as returnable milk bottles.
  3. It shall be the responsibility of any milk dealer who sells milk or
dairy products intended for resale  to  another  distributor  to  obtain
certification  from  such  distributor  that the requirements for proper
refrigeration transportation as provided in this section are met.
  4. The commissioner may exempt persons who purchase or handle milk  in
a  total quantity not exceeding twenty gallons per day from the require-
ments of this section.

  S  258.   Application  for  license.   An  applicant  for a license to
operate as a milk dealer shall file an application upon a blank prepared
under  authority  of  the  commissioner.   An applicant shall state such
facts concerning his circumstances and the nature of the business to  be
conducted  as  in  the opinion of the commissioner are necessary for the
administration of this chapter.  Such application shall  be  accompanied
by  the  license fee required to be paid.  The commissioner may, for the
purpose of establishing the rate of license fees and otherwise  carrying
out the duties of the commissioner under this chapter, classify licenses
and issue licenses to milk  dealers  to  carry  on  a  certain  kind  of
business,  including  but  not  limited to the purchase of milk, sale or
distribution of milk, processing or manufacture of milk, bargaining  and
collecting  for  the  sale  of  milk,  dealing in or brokering milk, and
hauling milk. Upon a finding that the applicant qualifies for a  license
under  the  standards  set forth in section two hundred fifty-eight-c of
this article, the commissioner shall issue such applicant a license.
  A  license  shall  be  for  a  period  not  exceeding  one  year.   An
application for renewal of license must be duly made at least sixty days
before  the  expiration  of  such license by all milk dealers then doing
business.

  S 258-a.  License fees. 1.  A milk dealer receiving, purchasing, handling
or selling during any of the twelve calendar months  immediately  preceding
the  period  for which the license is issued a daily average total quantity
of milk not exceeding four thousand pounds shall pay a license fee  of  one
hundred  dollars;  and  for each additional four thousand pounds of milk or
fraction thereof received, purchased, handled  or  sold,  the  license  fee
shall  be  increased  forty dollars.  In no event, however, shall a license
fee in excess of seven thousand five hundred dollars be required.
  2.   An  applicant  who has not previously engaged in such business shall
pay the minimum license fee as provided herein for  the  type  of  business
which  he  proposes to conduct.  Any such applicant who during any calendar
month of the first year covered by his license receives, purchases, handles
or  sells  a  greater quantity of milk than that upon which the license fee
paid by such milk dealer was based shall for each additional four  thousand
pounds  of  milk or fraction thereof pay an additional license fee of forty
dollars.
  3.  It  is not the intent that milk utilized by the applicant or licensee
or sold by him in the form of manufactured products shall  be  included  in
the  determination  of the amount of license fee. Sales by a milk dealer of
milk outside of  the  state  not  involving  the  receipt  or  handling  or
distribution within the state shall not be included in the determination of
the license fee.
  4.  The commissioner may, by rule or order, provide for licensing, at any
rate of license fee less than the rates herein fixed, any  milk  dealer  or
class  of  milk  dealers  which  he  is  authorized  to exempt from license
requirements.
  5.   A  milk  dealer  who  neither buys nor sells milk but who operates a
plant in which milk is  pasteurized,  processed  or  handled  shall  pay  a
license fee of one hundred dollars.
  6.   A  milk  dealer  which  is  a  producers`  bargaining and collecting
co-operative and does not operate milk plants or handle milk physically  or
operate  farm  bulk tank milk routes shall pay a license fee of one hundred
dollars.
  7.   A  milk  dealer  who  neither buys nor sells milk but who operates a
plant in which milk is manufactured shall pay a license fee of one  hundred
dollars.
  8.  A milk broker shall pay a license fee of one hundred dollars.
  9.   A  milk dealer who is not a cooperative corporation and who does not
buy or sell milk but who hauls milk for other  milk  dealers  shall  pay  a
license fee of one hundred dollars.
10. Notwithstanding any law to the contrary, all receipts of the department
pursuant  to  this  section  shall  be  deposited  in  an  account  in  the
miscellaneous  special  revenue  fund and shall be available solely for the
administration of this article. The comptroller is authorized and  directed
to  permit  interest  earnings  on any balances to accrue to the benefit of
this account.

  S 258-b. Prompt payment for milk purchases; security funds; bonding of
milk  dealers. 1. Scope of coverage. (a) For purposes of this section, a
cooperative corporation or association of producers shall be  deemed  to
be  a producer and not a dealer with respect to the milk of its producer
members under contract with such cooperative, and shall be deemed to  be
a  dealer  with  respect  to  milk purchased or received from non-member
producers.
  (b) Notwithstanding any other provision  of  this  section,  sales  or
other  transfers  of  milk  between cooperatives shall not be subject to
bond or assessment under the security provisions of this section.
  (c)  Any  corporation  or  association  of  persons  engaged  in   the
production  of  agricultural  products  which is operated for the mutual
benefit of its members and which qualifies as such under the  provisions
of  the  Capper-Volstead  Act shall be deemed to be a cooperative corpo-
ration or association for purposes of this section.
  2. Prompt payment for milk. (a) Every milk dealer shall: on or  before
the  last  day  of  each month, pay for all milk received from producers
during the first fifteen days of such month based upon a price or formu-
la as determined by the commissioner and every such milk  dealer  shall,
on  or  before  the  twentieth  day  of each month, pay the balance owed
producers for milk received during the preceding month provided, that  a
dealer  buying  from  a cooperative shall transmit payment by any method
whereby the cooperative receives cash or cash equivalent no  later  than
the  payment  dates  above prescribed, or receives a check no later than
two days before the payment dates above prescribed.
  (b) Notwithstanding any other provision of this section,  the  commis-
sioner  may  extend  the  time  for payment from dealers with respect to
purchases from producers of non-grade A milk for up to one hundred twen-
ty days after the last day of the month in which the milk was  received,
provided  such producers have requested the extension in writing in such
manner as may be acceptable to the commissioner.
  (c) Any producer who does not receive payment for milk sold or  deliv-
ered  to  a  milk dealer, within the time prescribed in paragraph (a) of
this subdivision, shall promptly notify the commissioner of such fact.
  (d) The commissioner may, if he  finds  it  is  necessary,  promulgate
after  hearing rules and regulations prescribing the period within which
stores, restaurants, hotels, public  institutions  and  other  wholesale
purchasers  of  milk  shall  pay  for  milk purchased or received from a
licensed dealer. No milk dealer or cooperative  shall  sell  or  deliver
milk, except on a cash on delivery basis, to any wholesale purchaser who
has  failed  to  make full payment within the period prescribed in regu-
lations promulgated by the commissioner pursuant to this paragraph.
  3. Payments to security funds. (a) Fund and filing  of  surety  bonds.
Any milk dealer, except a cooperative, who has not filed a bond or other
security  in full satisfaction of the requirements of subdivision six or
seven hereof and who buys, receives or otherwise handles  milk  received
from producers, shall, unless entitled to offsetting credits under para-
graph  (b)  of  subdivision four hereof, pay monthly to the commissioner
during each fiscal year an amount up to one and one-half tenths  of  one
percent  of  the average uniform price per hundredweight of milk for the
previous calendar year, as determined and announced by the  commissioner
on  or  before  the  thirty-first  day  of  March  of each year, on each
hundredweight of all such milk  purchased,  received  or  handled.  Such
payments  by  dealers  shall be deposited in the milk producers security
fund established by subdivision four hereof.
  (b) Whenever the commissioner determines that the balance in the  milk
producers  security  fund  exceeds  five  percent  of  the value of milk
purchases covered by the fund, the maximum rates  established  by  para-
graph  (a)  of  this  subdivision shall be reduced from one and one-half
tenths of one percent to one-tenth of one percent.
  (c)  (1)  In  addition to making such payments for deposit in the milk
producers security fund, any such dealer shall file with the commission-
er a mandatory minimum surety bond, executed by a surety company author-
ized to do business in this state  and  approved  by  the  commissioner,
conditioned  for  the prompt payment of all amounts due to producers for
milk sold or consigned by them to such dealer during  the  license  year
and  all  amounts due to the equalization or producer settlement fund of
any order promulgated  by  the  commissioner  pursuant  to  section  two
hundred  fifty-eight-m or two hundred fifty-eight-n of this article. The
bond shall be twelve times the amount equal to (i)  the  value  of  milk
purchased  or  received  from  producers  in  the two consecutive months
during the preceding twelve months in  which  the  dealer  purchased  or
received  the  highest  aggregate value of milk divided by the number of
days in those two months and (ii) the amount owed in the same  two-month
period  to  the equalization or producer settlement fund, divided by the
number of days in such months.
  (2) Upon an application  of  a  dealer  and  pursuant  to  regulations
promulgated  to effectuate the provisions of this paragraph, the commis-
sioner shall examine the financial condition of the  applicant  and  may
exempt  the  applicant  from  the  provisions  of  this paragraph if the
commissioner finds that the granting of the application would not  mate-
rially  affect  security  for  producers  or  the  viability of the milk
producers security fund; provided however, that for any applicant  where
the  amount  calculated in subparagraph one of this paragraph multiplied
by forty-three is less than two  hundred  fifty  thousand  dollars,  the
commissioner  shall  exempt  such  applicant from the provisions of this
paragraph unless the commissioner finds that the granting of the  appli-
cation  would  materially affect security for producers. Rules and regu-
lations to effectuate the provisions of this subparagraph shall  specify
the  criteria  to  be used in reviewing the applicant`s financial condi-
tion, the viability of the milk producers security fund, and the  effect
of the proposed exemption on the security afforded to producers deliver-
ing milk to the applicant.
  (d)  The commissioner may require a milk dealer, in addition to making
payments to the producers security fund and filing such mandatory  mini-
mum surety bond, to execute and file such further additional surety bond
or  other security as he may deem acceptable and sufficient, at any time
the commissioner finds (1) that the milk dealer has insufficient proper-
ty located within this state upon which to levy, pursuant  to  paragraph
(e)  of subdivision five of this section, in the event of a default by a
dealer making two monthly payments for forty days purchases of milk,  or
(2) that the dealer`s participation in the fund and filing such mandato-
ry  minimum  surety  bond will not otherwise afford adequate security to
all producers protected by the fund.
  4. Milk producers security fund. (a) There is  hereby  established  in
the  joint  custody  of the comptroller and the commissioner of taxation
and finance a fund to be designated as the milk producers security fund.
The commissioner shall deposit all monies  received  from  milk  dealers
pursuant to paragraph (a) of subdivision three hereof into the fund. The
funds  so  received  and  deposited in such milk producers security fund
shall not be deemed to  be  state  funds.    The  comptroller  shall  be
empowered to invest such funds pursuant to section ninety-eight-a of the
state  finance  law  consistent  with  the purposes of this section. The
commissioner is hereby authorized to draw upon such funds, in his or her
discretion, to purchase credit insurance for the  benefit  of  the  milk
producers  security fund. The expense of administering the provisions of
the milk producers security fund and of  administering  subdivision  one
hereof  shall  be  paid  from  the  fund to the commissioner on vouchers
certified by the commissioner with  the  approval  and  consent  of  the
director of the budget. Such payments from the fund shall not exceed two
and  one-half  percent of the total fund or one hundred thousand dollars
per annum, whichever is greater, provided that,  upon  approval  of  the
director  of  the budget, the actual costs incurred by the department in
carrying out its responsibilities with respect  to  such  provisions  of
this  article  may  be assessed against any monies available to the fund
upon appropriation by the legislature. The commissioner  shall  make  an
annual  report  of  the  receipts  to  and  disbursements from the fund,
including the cost of administration of the fund, which report shall  be
made  available  to  each  milk dealer and to any other person having an
interest in the fund. A copy of such report shall be  forwarded  to  the
director  of  the  division of the budget, the chairperson of the senate
finance committee and the chairperson of the  assembly  ways  and  means
committee.
  (b)  After  the  milk  producers security fund shall have equaled five
million dollars or such greater or lesser amount, up to five percent  of
the  value  of milk purchases to be covered by the fund, calculated upon
the basis of the average value of the milk covered by  the  fund  during
the preceding calendar year, as the commissioner may determine is suffi-
cient  to  protect  the  interests of producers, he shall administer the
fund in the manner prescribed herein. Periodically, but at  least  twice
each year, he may credit each milk dealer with an amount which bears the
same  relationship  to  the  total  money  in  the fund as that dealer`s
payments to the fund bear to the total payments to the fund by all deal-
ers. If the amount so credited to a milk dealer is greater than that due
from such milk dealer, the excess shall be paid or credited to such milk
dealer by the comptroller. No such credits or  payments  shall  be  made
unless the commissioner finds that the fund can be maintained at a level
which  is  sufficient  to  protect  the interests of producers. Any such
credit to a milk dealer`s account shall not be considered as payments to
the fund in computing further credits of such nature.
  (c) If a milk dealer participating in  the  security  fund  elects  to
terminate  his or her participation therein, he or she shall give notice
in writing to the commissioner six months prior to the expiration of the
license year and file a surety bond or other security on the  first  day
of  the  second  month before the end of the license year. A milk dealer
may thereupon apply for the return of his or her pro rata share  of  the
monies  in  the security fund, less administrative costs, based upon his
or her payments to the fund. Upon being satisfied that the  milk  dealer
is  not in default in any payments to producers or cooperatives and upon
renewal of the license, the commissioner shall authorize the comptroller
to pay to such milk dealer his or her pro rata share in up to six  equal
monthly payments.
  (d)  If  a milk dealer who participated in the milk producers security
fund ceases to do business as a milk dealer or sells or transfers his or
her business to another milk dealer, he or she may apply for the  return
of  his  or  her  pro  rata  share or assign his or her interests to the
buying dealer with the approval of the commissioner.
  (d-1) The commissioner shall employ every reasonable effort to identi-
fy and locate all persons entitled to receive unclaimed pro rata  shares
of  former  security  fund  participants.  In addition, the commissioner
shall for  a  period  of  five  years  after  identifying  any  person`s
unclaimed  share of one hundred dollars or more, or until the amount due
is claimed, whichever is sooner, publish such person`s name  and  notice
of his entitlement in a newspaper of general circulation in every county
where  the commissioner knows or has reason to believe such person main-
tained a principal office. Notwithstanding any provision  of  the  aban-
doned  property law, the pro rata shares of former security fund partic-
ipants which remain unclaimed for five years or more shall remain in the
producer  security  fund  for  use  as set forth in this subdivision and
subdivision five of this section.
  (e) Any milk dealer who  first  elects  to  participate  in  the  milk
producers  security  fund  shall make an initial payment to the fund, at
the rate most recently announced by the commissioner, pursuant to subdi-
vision three of this section, for milk purchased,  received  or  handled
from producers during the six months immediately preceding the date that
notice  of such election is given the commissioner, pursuant to subdivi-
sion ten of this section. Upon the payment of the initial  deposit  into
the  fund  and  filing of the mandatory minimum surety bond, as required
herein, a milk dealer electing to participate in the fund may  apply  to
the  commissioner  for  termination or adjustment of an existing bond or
the return or adjustment of any existing alternative security filed with
the commissioner. If there have been no  prior  purchases,  receipts  or
handling  of  milk by the dealer, such initial payment and the amount of
such bond shall be based upon an estimate of the purchases, receipts  or
handling of milk by such dealer for the first six months following entry
into  the  fund. After the first six months, the commissioner may adjust
such bond and initial deposit so that the amount of the initial  deposit
and bond are based upon the actual deliveries.
  5.  Claims  against  mandatory  minimum surety bond and milk producers
security fund. (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 commis-
sioner  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 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.
  (b)  No  claims  against  the producers security fund shall be allowed
for: (1) sales of milk to dealers not licensed by the state of New York,
(2) sales of milk by a producer to a milk dealer subsequent to its fail-
ure to pay within the time periods prescribed in subdivision two,  where
the  commissioner  finds,  after  due notice and opportunity of hearing,
that such extension of credit, whether direct or indirect, to such  milk
dealer by the producer did not constitute a reasonable exercise of busi-
ness  judgment. Claims shall be limited to the appropriate uniform price
of the milk, and in no event shall a claim be allowed for deliveries  of
milk  in excess of the amount owed for milk sold or delivered within the
first forty consecutive day period for which payment  was  not  received
from a dealer. Claims filed by a market administrator may be allowed for
amounts  owed  by a dealer to a producer settlement or equalization fund
of an order promulgated under section two hundred fifty-eight-m  or  two
hundred fifty-eight-n of this article.
  (c)  The  commissioner  shall  examine  the claims so filed, determine
after hearing upon reasonable notice to the claimant and to the default-
ing dealer the amount due upon such claims, and certify the  amount  due
each claimant, provided, however, that no hearing shall be required with
respect  to  a  claim  in  which  the defaulting dealer does not dispute
liability and the claimant and defaulting dealer agree and stipulate  to
the  amount  found  by  the  department  to be payable on said claim. In
determining the amount payable on any claim against a surety bond or the
milk producers security fund, the commissioner may allocate any payments
for  milk  made by a milk dealer to a claimant subsequent to its failure
to pay within the prescribed time period, to the earliest debt owed such
claimant by the milk dealer. Any amounts determined to be payable  on  a
claim will be chargeable first against the mandatory minimum surety bond
and  any  additional  surety  bond  or  other security filed pursuant to
subdivision three of this section. In the event the amount of the manda-
tory minimum surety bond and any additional surety bond are  not  suffi-
cient  to  pay  the amount owed the producers for the deliveries of milk
made in the first forty consecutive  days  for  which  payment  was  not
received from a dealer, a claim against the producer`s security fund may
be  allowed in an amount not to exceed the difference between the amount
recoverable on such bonds, and the amount owed  for  milk  delivered  in
such applicable period.
  (d)  The  commissioner`s  determination certifying the amount due each
claimant shall be final unless the defaulting milk dealer or the  claim-
ant  shall  institute  a proceeding pursuant to article seventy-eight of
the civil practice law and rules within thirty days  from  the  date  of
personal  service  of  a copy of the written determination upon the milk
dealer and producer affected thereby. If after  the  expiration  of  the
thirty  day  period the commissioner`s determination has not been stayed
by the supreme court in  a  proceeding  instituted  to  review  it,  the
commissioner  shall  bring an action on the bond or bonds and proceed to
obtain from any other security filed funds with which to pay the  claims
and,  to  the  extent that such funds are insufficient to pay the amount
due, direct the comptroller to pay the claimants from the moneys  avail-
able in the milk producers security fund. For the purposes of any action
brought on a bond, the commissioner`s determination shall be presumptive
evidence of the facts stated therein.
  (e)  If  any  claim  is  paid  from  the  producers security fund, the
defaulting dealer shall be liable to the commissioner for the benefit of
the fund for the amount of claims so paid. After service by first  class
mail  upon  the defaulting dealer of the commissioner`s certification of
payment of a claim from the fund for which the  dealer  has  been  found
liable  to the claimant, the commissioner may issue a warrant under seal
of the department directed to the sheriff of any  county  of  the  state
commanding  him  to levy upon and sell the real and personal property of
the defaulting dealer, found within his county, for the payment  of  the
amount  of  such  claim  with  interest  and  the  cost of executing the
warrant, and to return such warrant to the commissioner and pay  to  him
the  money  collected  by  virtue  thereof  within  sixty days after the
receipt of such warrant. The commissioner may file with the clerk of any
county a copy of such warrant, and thereupon the clerk  shall  enter  in
the judgment docket, in the column for judgment debtors, the name of the
defaulting  dealer designated in the warrant, and in appropriate columns
the amount of the dealer`s liability to  the  commissioner  for  claims,
interest  and costs, and the date when such copy is filed. Thereupon the
amount of such warrant so docketed shall become a lien  upon  and  shall
bind  the  real  and  personal  property and chattels real of the person
against whom it is issued in the same manner as a judgment duly docketed
in the office of such clerk. The said sheriff  shall  thereupon  proceed
upon  the same in all respects, with like effect, and in the same manner
prescribed by law in respect to executions issued against property  upon
judgments  of  a court of record, and shall be entitled to the same fees
for his services in executing the warrant, to be collected in  the  same
manner.  Upon such filing of a copy of a warrant, the commissioner shall
have the same remedies to enforce the dealer`s liability as  if  he  had
recovered judgment against the dealer for the amount of the warrant.
  (f)  In  the  event  that the surety company who shall have executed a
bond for a milk dealer shall fail to make prompt payment of all  amounts
due  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
pursuant to section two hundred  fifty-eight-m  or  two  hundred  fifty-
eight-n of this article such surety company shall, in addition to making
such  payment  on  the  bond,  pay  interest at the rate provided for in
section 5-501 of the general obligations law on the amounts so owed from
the date of the claim together with reasonable attorneys` fees and court
costs.
  6. Surety bonds. (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  produc-
ers  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 sure-
ty company authorized to do business in this state and shall be approved
by the commissioner. 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  pursuant  to section two hundred fifty-eight-m or two
hundred fifty-eight-n of this article.
  (b) The bond shall be in an amount equal to  (1)  the  value  of  milk
purchased  or  received  from  producers  in  the two consecutive months
during the preceding twelve months in  which  the  dealer  purchased  or
received  the  highest aggregate value of milk, divided by the number of
days in those two months and multiplied by forty,  and  (2)  the  amount
owed  in  the  same  two-month  period  to  the equalization or producer
settlement fund, divided by the number of days in such months and multi-
plied by forty.
  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 commis-
sioner may require.
  8. Additional bond or alternative security. Whenever the  commissioner
shall  determine  that  the  value  of  milk  purchased or received from
producers by a dealer who is not participating in the producers security
fund has increased, or that such increase may reasonably be anticipated,
so that the total amount of security does not comply  with  the  formula
set  forth  in subdivision six hereof, as applied to any consecutive two
month period during the current year,  the  commissioner  shall  require
such additional surety bond or securities in lieu thereof as will afford
producers the protection intended by 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.
The commissioner`s determination certifying 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  alterna-
tive  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 stat-
ed.  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 comp-
troller to pay such amounts to claimants from whatever monies are avail-
able 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 neces-
sary 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 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.
  10.  Time  for providing security. Surety bonds or securities, whether
filed in addition to or in lieu of participation in the  fund,  for  the
license  year  shall  be  filed with the commissioner not later than the
first day of the second month before the beginning of each license year.
Whenever an additional surety bond or alternative security  is  required
to  be  filed,  pursuant  to  paragraph (a) of subdivision three of this
section, such bond or alternative  security  shall  be  filed  with  the
commissioner  within  the  time limits fixed by the commissioner. A milk
dealer who elects to participate in the security fund and file a bond or
bonds pursuant to subdivision three of this section, in lieu of filing a
surety bond or alternative security pursuant to subdivision six of  this
section, shall notify the commissioner not later than three months prior
to  the date on which such change is to be made, and shall file the bond
or bonds and make the initial payment, as required by paragraph  (e)  of
subdivision  four of this section, not later than two months before such
change is to be made.
  11. (a) Notice of failure to provide security. Whenever a milk  dealer
fails to pay into the producers security fund or to file any surety bond
or  alternative  security,  as provided pursuant to this section, within
the time or times fixed by this section or the commissioner`s demand for
additional security, the commissioner shall publish in  a  newspaper  or
newspapers  having circulation in the area or areas in which the produc-
ers whose milk is sold or delivered to such milk dealer reside, a notice
stating that he made such demand or request of said  milk  dealer;  that
the  milk  dealer  has  failed to comply; that the commissioner does not
have on file such surety bond or alternative security  as  demanded,  or
that  he has not paid monies due the producers security fund as required
by  him; and that adequate security to protect such producers may not be
available to them as provided in  this  section.  In  addition  to  such
published  notice to producers, the commissioner shall send by certified
mail a copy of such notice to each producer delivering milk to such milk
dealer as he may be able to determine from records available to him  and
such  notice  shall  be addressed to such producer`s last known place of
residence. In addition to providing such notice, the commissioner  shall
issue  a notice of hearing directing the licensee to appear within twen-
ty-four hours or such longer period as he may direct and show cause  why
an order should not be entered revoking such dealer`s license or denying
the renewal thereof for failure to provide required security.
  (b) Payments to farmers. (1) It is hereby determined and declared that
the  assurance  of  prompt  and full payment to dairy farmers is for the
benefit of all the people of the state, and is so  directly  related  to
the public interest, the public health and general welfare that it is an
essential government function.
  (2)  The  commissioner  shall  annually  no later than November first,
assess the status of the milk producer security  fund,  the  anticipated
payments  from  and  receipts  to the fund for the following fiscal year
and,  in  connection  with  such  assessment,  estimate  the  additional
amounts,  if  any,  which  may  be needed by the fund to meet the fund`s
objectives in assuring prompt and full payment to dairy  farmers.    The
commissioner shall transmit this information in a report to the governor
for  his use in the preparation of the budget, and to the speaker of the
assembly and the president pro tempore of the  senate  for  use  in  the
consideration of the budget for such fiscal year.
  (3)  In  the  event  an appropriation is made for the purposes of this
paragraph and, thereafter, upon certification by the commissioner,  with
approval  of  the director of the budget, that a further sum is required
by the milk producers security fund to meet its obligations  and  accom-
plish  the  purposes  of this section, the comptroller shall, within the
limits of such appropriation, draw a warrant for the payment to the milk
producers security fund of an amount up to the amount of such sum.  Such
amount  shall  be  a  liability  of the milk producers security fund and
shall be repaid to the general fund pursuant to  a  plan  of  repayment.
Prior  to  the  institution  of  such  a  plan,  a copy thereof shall be
forwarded to the chairman of the senate finance committee and the chair-
man of the assembly ways and means committee, for use in  the  consider-
ation  of the budget for such fiscal year.  (4) Whenever the comptroller
draws a warrant for payment to  the  milk  producers  security  fund  as
provided  in subparagraph three hereof, the commissioner shall implement
the plan of repayment by promulgating through regulation  after  hearing
an  increase in the amount of assessment imposed under subdivision three
of this section to an amount not exceeding two-tenths of one percent  of
the average uniform price for the previous year.
  15. Prohibitions and violations. It shall be unlawful for a milk deal-
er  to purchase or receive milk from producers or from other dealers for
resale or manufacture unless such dealer files a surety bond or bonds as
required pursuant to this  section  and  makes  prompt  payment  of  any
assessment as required pursuant to this section. It shall also be unlaw-
ful  for  a  milk  dealer to sell milk to another milk dealer, if he has
been notified by the commissioner that the buying dealer has  failed  to
make  prompt  payment  to  producers, to the producer settlement fund or
equalization fund or to the milk producers security  fund,  or  if  such
buying  dealer  has  exceeded  the credit period as provided pursuant to
subdivision two of this section and the sale was not made upon the basis
of cash on  delivery.    In  addition  to  penalties  imposed  by  other
provisions  of  this article a violation of this section shall subject a
milk  dealer to a penalty in the sum of one hundred dollars for each day
that he is late in making payment into the milk producers security  fund
the assessment required by this section, for each day he sells milk to a
milk  dealer after being notified by the commissioner of that milk deal-
er`s failure to make any required payment into the milk producers  secu-
rity  fund,  or  for  each  day a milk dealer sells milk to another milk
dealer who has failed to make payments for milk  purchased  as  provided
pursuant  to  subdivision  two  of  this section. Any person who buys or
sells milk in violation of the credit period provided in subdivision two
of this section, shall be liable for a  civil  penalty  of  one  hundred
dollars a day for each day of violation.
  16.  Rules  and  regulations.  The  commissioner  after due notice and
public hearing may promulgate rules and regulations  to  carry  out  the
provisions and intent of this section.

  S 258-c.  Granting and revoking licenses. No license shall be denied to a
person  not  now  engaged  in  business  as  a  milk  dealer,  or  for  the
continuation  of a now existing business, and no license shall be denied to
authorize the extension of an existing business  by  the  operation  of  an
additional  plant or other new additional facility, unless the commissioner
finds after due notice and opportunity  of  hearing  to  the  applicant  or
licensee, that the applicant is not qualified by character or experience or
financial responsibility or equipment  properly  to  conduct  the  proposed
business,  provided however, that no new application shall be denied solely
for the reason of inadequate equipment if it is shown  that  provision  has
been  made  for the acquisition of same.  The commissioner may also decline
to grant or renew a license or may suspend  or  revoke  a  license  already
granted  in whole or in part, upon due notice and opportunity of hearing to
the applicant or licensee, when he is satisfied of the existence of any  of
the following reasons:
  (a)   That a milk dealer has rejected, without reasonable cause, any milk
purchased or has rejected without reasonable cause  or  reasonable  advance
notice,  milk  delivered  in  ordinary  continuance of a previous course of
dealing, except where contract has been lawfully terminated.
  (b)   That the milk dealer has failed to account and make payment without
reasonable cause, for any milk purchased.
  (c)   That  the milk dealer has committed any act injurious to the public
health or public welfare.
  (d)   Where the milk dealer is insolvent or has made a general assignment
for the benefit of creditors or has been adjudged a  bankrupt  or  where  a
money  judgment  has  been secured against him, upon which an execution has
been returned wholly or partly unsatisfied.
  (e)  Where the milk dealer has continued in a course of dealing of such a
nature as to satisfy the commissioner of  his  inability  or  unwillingness
properly to conduct the business of receiving or selling milk or to satisfy
the  commissioner  of  his  intent  to  deceive  or  defraud  producers  or
consumers.
  (f)   Where  the  milk  dealer  has  been a party to a combination to fix
prices, contrary to law.  A co-operative association of dairymen  organized
under  or  operated  pursuant to the provisions of chapter seventy-seven of
the consolidated laws and engaged in making collective sales  or  marketing
for  its  members or shareholders of dairy products produced by its members
or shareholders shall not be deemed or construed  to  be  a  conspiracy  or
combination  in  restraint  of  trade  or an illegal monopoly nor shall the
contracts, agreements, arrangements or combinations heretofore or hereafter
made by such association, or the members, officers or directors thereof, in
making such collective sales and marketing and prescribing  the  terms  and
conditions  thereof,  be  deemed  or  construed to be conspiracies or to be
injurious to public welfare, trade or commerce, if otherwise authorized  by
such  chapter  or  law. The provisions of and the remedies provided by this
subdivision, section and article shall be in  addition  to  and  shall  not
preempt  or  displace  the  provisions of article twenty-two of the general
business law.
  (g)   Where there has been a failure either to keep records or to furnish
the statements or information required by the commissioner.
  (h)  Where it is shown that any material statement upon which the license
was issued is or was false or misleading or deceitful in any particular.
  (i)  Where the applicant or licensee has been convicted of a felony.
  (j)   Where  the  applicant  is  a  partnership  or a corporation and any
individuals holding any position or interest or power  of  control  therein
has  previously been responsible in whole or in part for any act on account
of which a license may be denied, suspended or  revoked,  pursuant  to  the
provisions of this article.
  (k)   Where  the  milk  dealer has violated any of the provisions of this
chapter.
  (l)   Where  the  milk dealer has been duly required to give a bond or an
additional bond and has failed to do so,  or  has  failed  to  make  timely
payment  to  the  producers  security fund if he has elected to participate
therein, or to the cooperative security fund if required to  make  payments
thereto.
  (m)   Where  the  required  permit  from  the  local  health  officer has
terminated or been revoked.
  (n)   Where  the  milk dealer has ceased to operate the milk business for
which the license was issued.
  (o)  Notwithstanding  any  provision  of this article to the contrary, no
license shall be granted by the commissioner in the event an applicant  for
such  license  is  buying or accepting the business of another dealer until
the applicant has furnished the commissioner sufficient evidence  that  all
payments  due  producers for milk delivered to the selling dealer have been
made in full or that a portion of the purchase price reasonably  sufficient
to  satisfy  such  claims  has  been  placed  in an escrow account with the
commissioner.
  (p)  Assumption  of  business  by  licensed  dealer.  No  licensed dealer
purchasing the assets or assuming the operation of another licensed  dealer
may distribute milk in the area served by the dealer whose assets are being
purchased or whose operation is being assumed unless such dealer purchasing
the  assets  or  assuming  such  operation  has  furnished the commissioner
sufficient evidence that all payments due producers for milk delivered have
been  made  in  full  or  that  a  portion of the purchase price reasonably
sufficient to satisfy such claims has been placed in an escrow account with
the commissioner.
  The  commissioner  may grant or renew a license or may decline to suspend
or revoke a license conditionally, or upon the agreement of the licensee or
applicant  to  do or omit to do any definite act, but such condition and/or
agreement must have some appropriate relation to the administration of this
article.
  Whenever  a milk dealer`s license is denied or revoked or any application
for an original license is denied, there shall be filed in  the  office  of
the  division  of  milk  control  a  memorandum  by the commissioner, which
memorandum shall state the reasons for the denial of the application or the
denial  or  revocation  of  the  license.   There  shall  also  be  filed a
transcript of the testimony taken at the hearing given to the applicant  or
licensee.   A  transcript  of  the  testimony taken at the hearing shall be
given to the applicant or licensee for  whom  the  hearing  was  held.   In
addition,  the  said  memorandum  as filed in the office of the division of
milk control shall set forth findings of  fact  and  the  conclusions  upon
which  the  said commissioner shall base his denial or revocation.  The use
of the word license in this article shall include the  application  for  or
denial  of  an  extension of license.  Upon the filing of the memorandum in
the office of the division of milk control a copy thereof shall  be  mailed
forthwith to the applicant or licensee and to his attorney if the applicant
or licensee has appeared by attorney.
  The  commissioner  shall  notify an applicant for a license within thirty
days of receipt of the application as to whether all  information  required
by  the  commissioner  is  stated within the application. Upon receipt of a
completed application, the commissioner shall conduct any investigation and
hearing  and  shall  make  a  final  determination  on a license within one
hundred twenty days or, if a hearing has been held  with  respect  to  such
license,  within one hundred eighty days. Where the commissioner finds that
a final determination cannot be made within such period, he shall  indicate
his  reasons  for  extending the application review period by not more than
one hundred twenty days to the license applicant. Any delay resulting  from
adjournments granted at the request of the applicant, or as the result of a
judicial order, shall not be counted toward any time period provided for in
this paragraph.

    Sec.  258-d.   Proceedings  to  review.   The  action  of the
commissioner in refusing to grant  or  renew  a  license,  or  in
revoking  or suspending a license, or in conditioning or limiting
the granting or renewal of a license,  may  be  reviewed  in  the
manner  provided  by  article seventy-eight of the civil practice
law and rules, and the decision  of  the  commissioner  shall  be
final  unless within thirty days from the date of service thereof
upon the party affected thereby a court proceeding is  instituted
to  review  such  action.   The  pleadings upon which such review
proceeding is instituted shall be served upon the commissioner or
upon   an  assistant  commissioner,  personally,  in  the  manner
provided for the personal service  of  a  summons  in  an  action
unless  a  different manner of service is provided in an order to
show cause granted by the supreme court.

  S  258-e.  Violations; remedies.  1.  The commissioner may institute such
action at law or in equity as may appear necessary  to  enforce  compliance
with  any  provision  of  the  statutes,  rules and orders committed to his
administration, and in addition to any other remedy under article three  of
this  chapter  or otherwise may apply for relief by injunction if necessary
to protect the public interest without being compelled to allege  or  prove
that  an  adequate  remedy  at law does not exist.  Such application may be
made to the supreme court in any district or  county  as  provided  in  the
civil practice law and rules, or to the supreme court in the third judicial
district.
  2.  In addition to remedies provided by subdivsion one of this section;
  Whenever  the commissioner has reason to believe that any person has been
or is engaged in conduct which violates any provision of this article or of
any  regulation  promulgated thereunder he may issue a complaint specifying
the charges and giving reasonable notice of a hearing thereon.
  Whenever  the  commissioner  has  reason to believe that any milk dealer,
whether licensed or subject to license under this article, has been  or  is
engaging  in  any  conduct  for  which a license may be declined or revoked
pursuant to section two hundred fifty-eight-c, the commissioner may issue a
complaint  specifying the charges and giving reasonable notice of a hearing
thereon.
  The  person  so  complained  of  shall appear and show cause why an order
should not be entered by the commissioner requiring such  person  to  cease
and  desist  from  the conduct charged, or to perform those acts which will
constitute a discontinuance of the conduct charged.  After due  notice  and
opportunity  of  hearing  or  after  default  of  such person to appear and
proceed, if the commissioner shall find such person to  have  violated  any
provision  of  this  article or any regulation promulgated thereunder or to
have engaged in conduct for which a license  may  be  declined  or  revoked
pursuant  to  section  two  hundred  fifty-eight-c, he shall enter an order
requiring such person to cease and  desist  from  the  acts,  practices  or
omissions so found or to perform acts as aforesaid, and imposing such civil
penalty as he deems appropriate within the limits of subdivision four.
  3.   The  order of the commissioner issued pursuant to subdivision two of
this section shall be final subject to review proceedings under subdivision
five  of  this  section,  and  shall  not  be stayed by any court except as
provided in such subdivision five.  Upon failure of such person to obtain a
stay as herein provided, the commissioner may apply to the supreme court of
Albany county for an order directing  compliance,  and  if  such  order  is
issued,  any  failure  to  obey  such compliance order may be punished as a
contempt of court.
  4.  Any  civil penalty imposed by an order issued pursuant to subdivision
two of this section shall be  in  an  amount  not  less  than  one  hundred
dollars,  or  more  than  one  thousand  dollars for each violation of this
article or any regulation promulgated thereunder. In determining the amount
of  any  penalty  to  be  assessed under this subdivision, the commissioner
shall consider, but not be limited to consideration of: (i) the seriousness
of the violation for which the penalty is to be imposed and (ii) the nature
and extent of  any  previous  violations  for  which  penalties  have  been
assessed against the person. Each day`s violation may, in the discretion of
the commissioner, be deemed to constitute a separate offense. If, after the
expiration of the thirty day review period prescribed by subdivisions three
and five of this section, such order has not been  stayed  by  the  supreme
court  in  a  proceeding  for judicial review thereof, the commissioner may
file with the clerk of any county the original or a certified copy  of  the
order  directing  payment of a civil penalty, and thereupon the clerk shall
enter in the judgment docket, in the column for judgment debtors, the  name
of  the  person against whom the penalty was assessed by such order, and in
appropriate columns the amount of such person`s liability for such penalty,
together  with  interests and costs, and the date that such order is filed.
Upon such filing, the amount of the penalty so docketed shall become a lien
upon  and bind the real and personal property of the person against whom it
is issued in the same manner as a judgment duly docketed in the  office  of
such  clerk,  and  the commissioner shall have the same remedies to enforce
such liability as if a judgment in a court of  record  had  been  recovered
against such person.
  5.  Any person aggrieved by final order of the commissioner made pursuant
to this section may within thirty days after service  of  such  order  upon
him,  institute  a  proceeding  for  a  review  thereof pursuant to article
seventy-eight of the civil practice law and rules; provided, however,  that
no  stay  shall  be  issued, unless applied for within seven days after the
effective date and unless  the  applicant  makes  a  clear  and  convincing
showing   of   present,   substantial   and   irreparable  injury,  clearly
over-balancing the public interest in immediate compliance which is  hereby
declared as the policy of this act.

    Sec.  258-f.   Records.   The  commissioner  may require milk
dealers to keep the following records:
    (a)   A record of all milk received, detailed as to location,
and as to names and addresses of suppliers, with butter fat test,
prices paid, deductions or charges made.
    (b)   A  record  of  all  milk  sold  classified as to grade,
location and market outlet and size and style of container,  with
prices and amounts received therefor.
    (c)  A record of quantities and prices of milk sold.
    (d)    A   record  of  the  quantity  of  each  milk  product
manufactured and quantity  of  milk  and/or  cream  used  in  the
manufacture of each product.  Also the quantity and value of milk
products sold.
    (e)  A record of wastage or loss of milk or butter fat.
    (f)   A record of the items of the spread or handling expense
and profit or loss, represented by  the  difference  between  the
price paid and the price received for all milk.
    (g)  A record of all other transactions affecting the assets,
liabilities, or net worth of the licensee.
    (h)   Such other records, and information as the commissioner
may deem necessary for the proper enforcement of this article.

  Sec.  258-g.   Reports.  Each milk dealer shall, from time to time, as
required by rule or order of the commissioner, make and file a  verified
report on forms prescribed by the commissioner of all matters on account
of which a record is required to  be  kept,  together  with  such  other
information  or facts including an audited financial statement as may be
pertinent and material within the scope of the  purpose  and  intent  of
this chapter.  Such report shall cover a period of time specified in the
order.

    Sec.  258-j.   Construction, exceptions and limitations.  The
license required by this article shall  be  in  addition  to  any
other  license  required by this chapter or otherwise required by
law.  This article shall apply to the city of New York, but shall
not  be construed to conflict with, alter or repeal laws in force
relating to the board of health or the department  of  health  of
the  city  of New York, nor the health code in force in such city
or any amendments thereof duly adopted nor shall any provision of
this  article  or any regulations adopted thereunder, relating to
matters of health, sanitation or purity or wholesomeness of  milk
which  is  in conflict with the health code or the regulations of
the board of health or the department of health  of the  city  of
New York, apply to the city of New York, or to the production and
transportation of milk for  said  city.   No  milk  dealer  shall
hereafter  accept for sale or distribution in a marketing area or
at a plant supplying such marketing area when such marketing area
is  regulated  by  a  state  milk  marketing order, milk from any
premises on which milk is produced or from  any  plant  in  which
milk is handled unless such premises constitute a milk production
area dairy farm as defined by section two  hundred  fifty-eight-l
or  unless the milk from such plant has been received for sale or
distribution in such marketing area or at a plant subject to such
order  within  the  past  two  full  calendar years without first
satisfying the commissioner that such proposed added milk  supply
is  reasonably  needed  for  such  marketing  area,  and that the
acceptance of  such  added  milk  supply  will  not  deprive  any
municipality  or any other marketing area of a supply, present or
future,  more  conveniently  related  to  it.   If  any   clause,
sentence,  paragraph or part of this article shall for any reason
be adjudged by any court of competent jurisdiction to be invalid,
such   judgment  shall  not  affect,  impair  or  invalidate  the
remainder thereof, but shall be confined in its operation to  the
clause,  sentence,  paragraph, or part thereof, directly involved
in the  controversy  in  which  such  judgment  shall  have  been
rendered.   No  provision  of  this  article  shall  apply  or be
construed to apply to  foreign  or  interstate  commerce,  except
insofar  as  the  same  may  be  effective pursuant to the United
States constitution and to the laws of the United States  enacted
pursuant  thereto.   Technical,  legal  and  other assistants and
employees in the service of the milk control board  at  the  time
such  transfer  takes place shall be transferred to the division,
subject to qualifying examinations to be conducted by  the  civil
service  commission  as soon as convenient after transfer, and in
the meantime they shall serve  without  examination.   The  civil
service   commission   shall   designate,   upon  advice  of  the
commissioner the positions which it is not practicable to fill by
competitive   examinations,  including  the  director,  assistant
director, counsel and assistant counsel.

  S  258-k.   Declaration of policy. For the purpose of implementing the
provisions of section two  hundred  fifty-eight-k  through  section  two
hundred  fifty-eight-n  of  this article, it is hereby declared that the
dairy industry is a paramount agricultural industry of  this  state  and
the  normal  processes  of  producing  and marketing milk have become an
enterprise of vast  economic  importance  to  the  state  and  of  vital
interest  to  the  consuming  public  which  ought to be safeguarded and
protected in the public interest; that it is the policy of this state to
promote,  foster  and encourage the intelligent and orderly marketing of
milk through producer owned and controlled cooperative associations  and
to  promote,  foster and encourage as an incident of such marketing, the
maintenance, by such associations, jointly or in cooperation with  other
cooperative  associations of programs designed, by means of advertising,
publicity, education or otherwise, to promote increased demand  for  and
consumption  of  milk  and  dairy  products;  that  unfair,  unjust  and
destructive demoralizing trade practices have been and are likely to  be
carried  on in the production, sale, processing and distribution of milk
and that it is a matter of public interest and for  the  public  welfare
for  the  state  to  promote  the orderly exchange of commodities and in
cooperation  with  the  federal  government  or  other  states  in   the
regulation  of  interstate commerce, to take such steps as are necessary
and advisable to protect the  dairy  industry  and  insure  an  adequate
supply  of milk for the inhabitants of this state; that for such purpose
public interest requires, as necessity therefor has arisen or may arise,
the fixing of prices of milk to be paid to producers and associations of
producers where there has been or is a disruption of  orderly  marketing
of  milk  in  any  marketing area by reason of surpluses or by reason of
unfair, unjust or destructive trade practices, that  in  order  to  make
such  price-fixing  effective  it  is necessary that the benefits of the
fluid market and  the  burden  of,  and  the  expense  of,  handling  of
surpluses,  be shared equally by all producers of milk for the marketing
area and to this end that dealers not handling their proportionate share
of the surplus shall as part of the price of their milk make payments to
a fund to equalize the prices of milk to producers and to share the cost
of handling surplus so as to remove one of the principal causes of price
demoralization.

  S  258-l.  Producers` bargaining agencies and distributors` bargaining
agencies.  (a)  Incorporated producers` associations operated under  and
subject  to  the  cooperative corporations law of this state, or similar
laws of another state and organized and controlled  by  milk  producers,
may  establish producers` bargaining agencies for the various production
areas  of  the  state  designated  by  the  commissioner.    Cooperative
corporations  similarly  incorporated hereafter and owned and controlled
by producers shall  be  entitled  to  use  and  participate  in  such  a
bargaining  agency  and be represented by it in order that producers not
now represented by a cooperative association  may  be  entitled  to  the
benefits of this act.
  Upon   presentation  of  a  written  certification  by  a  cooperative
corporation qualified to receive cooperative payments under a state or a
joint  federal  and  state  milk  marketing  order,  or  orders, or by a
cooperative corporation affiliated  with  a  federation  of  cooperative
corporations  similarly  qualified,  to  a licensed milk dealer, setting
forth a list of its members for the payment of whose milk said dealer is
responsible,  such  dealer  shall  make  payments  to  such  cooperative
corporation from moneys due such listed members for  milk  purchased  by
the  dealer in such amounts as such cooperative shall certify is payable
to it; provided that (a) at least the names of 10 members  are  one  the
list,  or  (b)  in  the  case  of dealers receiving milk from 17 or less
producers at a plant, the names of at least 51% of such producers are on
the list.  Such amounts shall be payable monthly to the treasurer of the
cooperative corporation, together with a compilation of milk poundage to
which  such  payment  is  related.  At intervals, not more frequent than
monthly, each such cooperative shall certify to the dealer involved  any
additions or withdrawals from its listed membership.  As to such changes
in memberships so certified, the  dealer  shall  make  payments  on  the
additional  producers, but shall not be required to make payments to the
cooperative corporation on the withdrawn producers.  In no event shall a
dealer be required to make payments on a producer who is not listed as a
member by the certifying cooperative corporation.
  The  voting  power of each association participating in such an agency
shall be on the basis of one vote for each one hundred  producers  under
contract  with  such  association for the marketing of their milk within
such marketing area, and in case of an association with  less  than  one
hundred   producers  under  contract  with  it,  a  fractional  vote  in
proportion to the number of such producers.  Only active contracts shall
be considered.
  The  purpose  of  a  producers`  bargaining  agency  is  to  negotiate
agreements on the basis of orders in the respective marketing areas  for
presentation  to the commissioner for his consideration and approval, as
provided in section two hundred and fifty-eight-m herein.  A  producers`
bargaining  agency shall be authorized to negotiate with a distributors`
bargaining agency in such marketing area in regard  to  arrangements  or
agreements  to  be presented to the commissioner as a basis of marketing
agreements  or  orders  pursuant  to  said  section  two   hundred   and
fifty-eight-m.
  Each  association  upon joining or employing the producers` bargaining
agency shall file with  it  a  certified  copy  of  its  certificate  of
incorporation,  its  by-laws,  copies  of  form  of  contracts  with its
producers and a certified statement of  the  number  of  such  contracts
which are in force.
  A  producers`  bargaining  agency may appear before and negotiate with
the commissioner  in  regard  to  marketing  agreements  or  orders,  as
provided in section two hundred and fifty-eight-m herein.
  It  shall  be lawful for such producers` bargaining agency to act as a
common marketing agency for  the  various  cooperative  associations  of
producers which it represents and such cooperative associations may make
contracts with each other and  with  such  producers`  agency  for  such
purpose  and  for  the  collective  processing,  preparing  for  market,
handling and marketing of the products  of  such  associations  and  for
effectuating  the  purposes  of  this  act.   In  order to carry out and
effectuate such purposes, contracts and agreements may be made  pursuant
to  section  twenty-five  of the co-operative corporations law and as to
interstate commerce pursuant to act of congress of February  eighteenth,
nineteen  hundred  twenty-two, entitled "An act to authorize association
of producers of agricultural products,"
  (b)   A  distributors`  bargaining  agency  may  be  organized  by the
distributors in a marketing area.  The voting power of each  distributor
in such bargaining agency shall be in proportion to the quantity of milk
distributed by him in such area.  Such quantity shall be  determined  by
that   distributed   during  the  preceding  year  as  reported  to  the
commissioner.  In the New York  metropolitan  milk  marketing  area  the
voting  power  of each distributor shall be on the basis of one vote for
each ten million pounds of milk distributed in such  market  during  the
preceding  year and in case of a distributor handling a less quantity of
milk, a proportionate fractional vote.  In  other  marketing  areas  the
voting  basis  shall  be  one  vote for each one hundred thousand pounds
distributed  during  the  preceding  year  in   such   market   with   a
proportionate  fractional  vote  in case of distributors handling a less
quantity of milk.  The purpose of distributors` bargaining  agencies  is
to negotiate with producers` bargaining agencies as to the agreements or
the basis of orders in the respective marketing areas  for  presentation
to  the  commissioner for his consideration and approval, as provided in
section two hundred fifty-eight-m herein.
  A distributors` bargaining agency may appear before and negotiate with
the commissioner  in  regard  to  marketing  agreements  or  orders,  as
provided in section two hundred fifty-eight-m herein.
  Producers`  bargaining  agencies and distributors` bargaining agencies
may also meet and negotiate in order to carry out the purposes  of  this
act  and  subject  to  the  approval of the commissioner, as provided in
section two hundred fifty-eight-m, may make  marketing  agreements  with
each  other  and  with  cooperative  associations  in  relation  to  the
marketing of milk which may be handled or distributed in more  than  one
marketing area.  Such agencies may also meet and negotiate and take such
reasonable measures as are necessary and advisable to cooperate with the
commissioner  and legally constituted authorities of other states and of
the United States with respect to  the  handling  and  control  of  milk
handled  in  interstate  commerce  and  carry  out  and  effectuate  the
provisions of section two hundred fifty-eight-n.
  Except  as specifically provided in section two hundred fifty-eight-m,
the activities and operations  of  producers`  bargaining  agencies  and
distributors`   bargaining  agencies  and  of  the  constituent  members
thereof,  and  contracts,  agreements  or  arrangements  made  by  them,
pursuant  to  the  provisions  of  this  subdivision, and of section two
hundred fifty-eight-m hereof, shall not be deemed  or  construed  to  be
conspiracies,  combinations,  contracts  or  agreements  in restraint of
trade or commerce or an illegal monopoly.
  "Milk production area" as used in this article means those dairy farms
maintained primarily as a source of fluid milk  for  a  marketing  area.
Such  primary  source  of  supply  shall  include  farms  from which all
shipments of milk  have  been  subject  to  the  minimum  uniform  price
provisions  of  a marketing order or agreement for such market during at
least a portion of the preceding two years,  together  with  such  other
farms  as may hereafter be designated by the commissioner as a source of
supply for the marketing area in the manner prescribed  by  section  two
hundred fifty-eight-j.

  S 258-m. Orders  fixing  prices  for milk and marketing agreements. 1.
Upon the petition of a producers` bargaining agency  of  the  production
area supplying a marketing area, such agency representing at least thir-
ty-five per centum of the producers of milk therein, alleging the exist-
ence  of  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 shall be effective, and upon the written request  of  the  peti-
tioner,  the commissioner shall 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 interim
price shall be set within five days of such written request and  to  the
extent practicable apply to any milk purchased on or after the first day
of  the  month following such determination. Such interim price shall be
in effect until the final determination regarding the petition  is  made
pursuant to the provisions of this article and is enforceable and effec-
tuated,  provided  however, such interim price shall be in effect for no
longer than one hundred eighty 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
the commissioner to call a public hearing for the consideration of  said
petition  and  to  give  notice thereof by advertising such call in such
newspaper or newspapers of general circulation in such marketing area as
the commissioner 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 and other persons, including  producers,  distribu-
tors  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 necessary to
accord due process, he or she may extend the hearing for a period 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  exist so affecting the orderly marketing of milk
in such area, that public  interest  requires  that  the  public  policy
declared  in  section two hundred fifty-eight-k of this chapter 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, and that it is favored by at least
sixty-six and two-thirds per centum of the producers of milk produced in
the production area for said marketing area,  the  commissioner  may  by
order fix and determine for such marketing area fair and equitable mini-
mum prices to be paid to producers. The determination of the commission-
er  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 determination. 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 hearing whenever the commission-
er  shall  find either that such conditions have ceased to exist or that
such termination is favored by at least thirty-five 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
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.
  5. Marketing agreements. It shall be lawful for a producers`  bargain-
ing  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-
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, 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 commissioner 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. If approved by sixty-six and two-thirds per centum of the producers
affected, any order or marketing agreement fixing the price to producers
under either subdivision one or subdivision five  of  this  section  for
market  or  markets,  may  provide  for an equalization 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 differentials  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
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.  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. 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. No marketing agreement or order shall prevent a cooperative associ-
ation from blending as heretofore the proceeds of all sales and distrib-
uting 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. 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 depos-
ited  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 administra-
tors 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.
  11.  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 advan-
tages of milk and milk products and with the economy in the diet, and to
command, for milk and dairy products, consumer attention consistent with
their importance and value, or  that  such  associations  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  associ-
ations of producers which operate milk receiving stations or manufactur-
ing  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  supply-
ing  a marketing area and after a public hearing and subsequent producer
approval as required by this section.
  12. "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 258-n.  Interstate and federal compacts.  The commissioner is hereby
authorized to confer  with  legally  constituted  authorities  of  other
states  and  of  the United States with respect to uniform milk control,
including sanitary requirements with states and/or  as  between  states,
and  with  the  federal  government  in  its  control of milk handled in
interstate commerce, and may exercise his  powers  hereunder  to  effect
such  uniform  milk  control.   He  may join with such other authorities
federal and state in  conducting  joint  investigations,  holding  joint
hearings  and  issue joint or concurrent orders, or orders supplementary
to those of the federal government, and shall have the power  to  employ
or  designate  a  joint agent or joint agencies to carry out and enforce
such joint, concurrent or supplementary orders.
  In  order  to carry out the policies set forth in sections two hundred
fifty-eight-k and two hundred fifty-eight-p, the commissioner is  hereby
vested  with  the authority to enter into a compact or compacts or other
types of agreements, with the legally constituted authorities  of  other
states and/or the United States to provide for uniform milk control and,
in order to effectuate such uniform milk control, he may  join  with  an
agent  or  agencies  to exercise under such compact or compacts or other
types of agreements the powers conferred upon him by this  article  with
respect  to  the administration of uniform milk control.  In the case of
market orders including those  covering  prices,  any  such  compact  or
compacts  or  other  types  of  agreements  may  provide  for  necessary
assessments upon the handlers regulated thereunder, in  order  to  cover
the  cost of administering such uniform milk control, including, without
limitation, the cost of auditing milk dealers` classifications.
The  commissioner  may  effectuate this section by any type of agreement
other than a formal compact if a formal compact is not  constitutionally
required.

    Sec.  258-o.   The  commissioner  is  hereby  authorized  and
directed to make a study of the sanitary regulations,  codes  and
rules  applicable to milk and milk products produced in the state
of New York, and to study and report to the governor the possible
economic  impact  of a national sanitation act upon New York milk
production and New York dairy farmers.

  S 258-p.  Declaration of policy. It is hereby declared:  that the milk
industry is a paramount agricultural activity of this state and  of  the
northeast  in  a region comprising the New England states and the Middle
Atlantic states and is  a  business  affecting  the  public  health  and
welfare  of the inhabitants of this state and of the northeast; that the
production and marketing of milk of the dairy farms of this state and of
states  in  the  northeast  region is of vast economic importance to the
state and to the region; that compliance  with  reasonable  requirements
for  the production and marketing of a safe and high quality milk supply
is a matter of great importance both to the welfare of the dairy farmers
of  this  state  and  the  northeast,  and the health and welfare of the
consumers of milk and dairy products; that the production conditions  in
the  northeast including the climate, topography and soils are about the
same but marketing conditions are unique as compared to the remainder of
the  United  States in that practically all of the milk in the northeast
is  produced  for  fluid  markets  because  of  the   concentration   of
population.  The  natural  marketing  area,  under present conditions of
production and marketing, lies  within  the  boundaries  of  the  eleven
different states with widely different laws and regulations which govern
the economic climate and sanitary conditions under which milk and  dairy
products    are   marketed.   Artificial   barriers   have   contributed
significantly to the loss of competitive position by New York and  other
Northeastern  states.  The  market  share  held by milk producers in the
region has declined. The marketing system for milk and dairy products in
the  northeast  has  been  and  still  is  badly  fragmented.  Assembly,
administration,  operating  and  sales  costs  are   excessively   high.
Cooperative  membership  is  below  that  in  most areas of the country.
Competition from other regions of the country will  increase.  A  common
marketing  area  in  the  northeast  is  necessary  for a prosperous and
growing dairy industry and it is in the best interest of  consumers.  It
is  therefore essential that there be uniformity of laws and regulations
governing the production, processing and marketing  of  milk  and  dairy
products   in  the  northeast.  The  lack  of  uniformity  of  laws  and
regulations involving inspection of farms and plants, labeling of  dairy
products  and  their imitations, standards for dairy products, licensing
of milk dealers and the terms of milk market orders have been a  serious
deterrent  to  expanding markets for northeast dairy products and costly
to consumers.

  S  258-q.  Action  for a uniform northeast market. The commissioner is
hereby authorized and directed  to  act  independently  or  through  the
Northeastern  Association  of  State  Departments  of  Agriculture,  the
National Conference on Interstate Milk Shipments and any other group  or
agency,   to  achieve  uniformity  of  laws  and  regulations  involving
inspection of farms  and  plants,  sanitary  codes,  labeling  of  dairy
products  and  their imitations, standards for dairy products, licensing
of milk dealers and the terms of both federal and state  milk  marketing
orders  in effect in the area. He is further directed to work toward the
elimination of the unnecessary and costly barriers to the free  flow  of
milk  created  by  laws  and regulations originally  enacted to help the
income of dairy farmers but whose present effect is  to  interfere  with
the  free flow of milk and to reduce the efficiency of distribution. The
commissioner will continuously endeavor to  effectuate  the  purpose  of
this   section   by   seeking   uniform   laws  and  regulations,  joint
investigations, joint hearings, and  joint  and  concurrent  orders  and
regulations.  He further will endeavor to create a joint agency or joint
agencies to carry out and enforce joint and concurrent  orders  and  any
other  joint  activities. Annually, before the end of the fiscal year he
will prepare and send to the governor and  the  legislature  a  detailed
report on his activities.

  S  258-r.  Actions  to  eliminate  trade barriers. 1. Any dairy farmer or
cooperative producing milk within this state, any licensed milk  dealer  or
general  farm  organization    may  file  a complaint with the commissioner
alleging that unconstitutional or otherwise illegal barriers to or  burdens
upon interstate commerce in milk or other dairy products exist in the laws,
regulations or practices of any other  state,  or  in  the  municipalities,
agencies or instrumentalities thereof or in the regulations or practices of
any federal agency. The complaint shall specify the nature of such barriers
or  burdens  and  the  manner  in  which the complainant, or its individual
members, is aggrieved thereby.
  2. The commissioner shall determine whether such barriers or burdens have
or may ultimately have an adverse impact upon New York producers or dealers
generally  and  determine  whether  the  public interest would be served by
their elimination. If the commissioner  concludes  that  action  upon  such
complaint  is  in the general public interest of this state, he shall refer
the complaint to the  attorney  general.  The  commissioner  shall,  within
ninety  days  of  the  receipt  of  such  complaint, inform in writing, the
complainant and the attorney general as to the status thereof. Upon  making
a  determination  with  respect  to  such complaint, the commissioner shall
provide to the complainant and the attorney general a written statement  of
such determination setting forth the reasons therefor.
  3.  The  commissioner  shall  maintain  a  continuing review of the laws,
regulations  and  policies  of   the   eleven   Northeast   states,   their
municipalities   and  federal  agencies  for  the  purpose  of  identifying
unconstitutional or illegal barriers to the marketing of New York milk  and
dairy  products.  The  commissioner  may initiate and refer to the attorney
general his own complaints with respect to any such barriers.
  4.  Upon  referral  of  any  complaint  by the commissioner, the attorney
general may bring an action in any state or federal court within or outside
the  state,  for  the purpose of invalidating such barriers or burdens upon
interstate commerce and for such other relief as may  be  appropriate.  The
attorney general may bring such action in a parens patriae capacity.
  5.  The  attorney  general  shall,  within ninety days of receipt of such
referral, inform the commissioner in writing  as  to  the  status  of  such
referral.  Upon  deciding whether to commence an action with respect to the
complaint, the attorney general shall provide to the commissioner a written
statement of such decision and the reasons therefor.
  6.  The  commissioner  shall  make  a  report  to  the  governor  and the
legislature setting forth his  findings,  conclusions  and  recommendations
resulting  from the review of trade barriers pursuant to this section. Such
report shall also set forth the number and nature  of  complaints  received
and  their  disposition and the number and nature of complaints referred to
the attorney general. The attorney general shall likewise make a report  to
the  governor  and  the  legislature setting forth the number and nature of
complaints referred to him, their disposition and the reasons therefor, and
the  status of all pending cases. The annual report of the commissioner and
the attorney general shall be made no later than the  first  day  of  July,
nineteen  hundred  eighty-eight and no later than the first day of February
for every year thereafter.