§ 258-M — Orders fixing prices for milk and marketing agreements

§ 258-m. Orders fixing prices for milk and marketing agreements. 1.\nUpon the petition of a producers' bargaining agency of the production\narea supplying a marketing area, such agency representing at least\nthirty-five per centum of the producers of milk therein, alleging the\nexistence of conditions so affecting the orderly marketing of milk in\nsuch area that public interest requires regulation of prices of milk in\nsuch area and equalization of the burden of surplus milk and expense of\nhandling it, and sharing the benefits of the fluid market in order that\nthe public policy declared in section two hundred fifty-eight-k of this\nchapter shall be effective, and upon the written request of the\npetitioner, the commissioner shall set, without a hearing, an interim\nprice for class I fluid milk, and may set an interim price for class II\nand/or III milk. In determining such interim price, the commissioner\nshall take into consideration, among other factors: (a) the prices being\npaid to producers; (b) the costs of production to producers; (c) any\nchanges in the ratio of index of prices received for milk to index of\nprices paid by dairy farmers; (d) the level of prices paid to producers\nin adjoining markets; and (e) the interests of the general public. Such\ninterim price shall be set within five days of such written request and\nto the extent practicable apply to any milk purchased on or after the\nfirst day of the month following such determination. Such interim price\nshall be in effect until the final determination regarding the petition\nis made pursuant to the provisions of this article and is enforceable\nand effectuated, provided however, such interim price shall be in effect\nfor no longer than one hundred eighty consecutive calendar days. During\nsuch time when the interim price is in effect, the commissioner shall\nprovide for and enforce a mechanism for compensatory payments and have\nthe authority to establish and administer an equalization pool\nthroughout the entire state or any part thereof. Such interim price\nshall be reviewable by a person aggrieved in a proceeding pursuant to\narticle seventy-eight of the civil practice law and rules. The\neffectiveness or enforcement of such interim price regulation shall not\nbe restrained, stayed, or enjoined pendente lite. In addition, it shall\nbe the duty of the commissioner to call a public hearing for the\nconsideration of said petition and to give notice thereof by advertising\nsuch call in such newspaper or newspapers of general circulation in such\nmarketing area as the commissioner deems advisable. Such notice shall\nspecify a time and a place within the marketing area at which the\nhearing will be held and at which the applicants and other persons,\nincluding producers, distributors and consumers and associations\nthereof, may be heard. In not more than fifteen days upon receiving the\npetition the commissioner shall set the hearing date in accordance with\nthe above provisions. Such hearing shall commence in not less than\nfifteen days but not more than twenty days of the notice specifying the\ndate and time of the hearing. Such hearing shall conclude within fifteen\ndays of commencement, provided however, if the commissioner determines\nin writing that the hearing has been conducted with due diligence but an\nextension is necessary to accord due process, he or she may extend the\nhearing for a period not to exceed ten days. If after such hearing the\ncommissioner shall find, upon the record of the proceeding that\nconditions referred to in section two hundred fifty-eight-k of this\nchapter exist so affecting the orderly marketing of milk in such area,\nthat public interest requires that the public policy declared in section\ntwo hundred fifty-eight-k of this chapter shall be effective and that it\nis necessary that prices for milk to producers and associations of\nproducers be fixed by the commissioner, as expressed by section two\nhundred fifty-eight-k of this chapter, and that it is favored by at\nleast sixty-six and two-thirds per centum of the producers of milk\nproduced in the production area for said marketing area voting,\nindividually or through cooperatives, in the referendum, the\ncommissioner may by order fix and determine for such marketing area fair\nand equitable minimum prices to be paid to producers. The determination\nof the commissioner as to whether or not by order to fix and determine\nminimum prices shall be made within forty days after such hearing,\neffective on the first day of the month following the determination. If\nthe commissioner determines not to fix and determine minimum prices, he\nshall state his reasons in writing and transmit same to the petitioner,\nthe governor, the temporary president of the senate and the speaker of\nthe assembly. Such price fixing order or orders shall be rescinded\neffective at the end of the current month after a public hearing\nwhenever the commissioner shall find either that such conditions have\nceased to exist or that such termination is favored by at least\nthirty-five per centum of the producers of milk handled within such\nmarket. For purposes of this subdivision, unless otherwise specified,\ndays shall mean business days.\n 2. The commissioner may, from time to time upon like petition, during\nthe existence of such conditions revise the prices so fixed, after\nholding a hearing thereon. Whenever as herein provided a producers'\nbargaining agency of a production area supplying a marketing area shall\nfile a petition and/or amended petition praying for any relief provided\nin this article, it shall be lawful for a distributors' agency of such\nmarketing area to file a petition and/or amended petition providing for\nthe consideration of issues therein raised relative to the petition\nand/or amended petition of the producers' bargaining agency, or to an\nexisting milk marketing order. Upon receipt of any such petition of a\nproducers' bargaining agency for any such marketing area, the\ncommissioner shall mail a copy thereof to the secretary of the\ndistributors' bargaining agency for such marketing area, if any, which\nmeets the qualifications set forth in the last sentence of this\nparagraph. If such distributors' bargaining agency files either a\npetition or an amended petition with the commissioner or notifies the\ncommissioner that no such petition will be filed, the commissioner may\nproceed to give notice of hearing as provided in subdivision one of this\nsection; otherwise the commissioner shall defer the giving of such\nnotice of hearing for a period of ten days after such distributors'\nbargaining agency has received from the commissioner a copy of the\npetition and/or amended petition of the producers' bargaining agency.\nThe commissioner shall mail a copy of the distributors' bargaining\nagency petition to the secretary of the producers' bargaining agency and\nshall give such notice of such petition by publication or otherwise as\nthe commissioner deems advisable. Evidence upon the proposals set forth\nin both the producers' and distributors' bargaining agency petitions\nshall be received at the same hearing. The commissioner shall not be\nrequired to furnish a copy of any petition of a producers' bargaining\nagency to a distributors' bargaining agency nor shall such distributors'\nbargaining agency be entitled to file a petition and to be heard as\nherein provided unless within the calendar year preceding the filing\nwith the commissioner of the producers' bargaining agency petition such\ndistributors' bargaining agency shall have filed with the commissioner a\nlist of its distributor members and the names and addresses of its\nofficers and unless such distributors' bargaining agency represents not\nless than sixty per centum of the quantity of milk distributed in such\nmarketing area, exclusive of that distributed by cooperative\ncorporations, as determined by the reports submitted to the commissioner\nduring the preceding license year.\n The provisions of this subdivision relative to distributors'\nbargaining agency petitions shall not apply to any milk marketing area\nor order, jointly administered by the commissioner and any officer or\nagency of the United States or of any other state.\n 3. Before fixing any prices pursuant to the provisions of the two\npreceding paragraphs, the commissioner shall investigate what are\nreasonable costs and charges for producing, hauling, handling,\nprocessing and/or other services performed in respect of milk and what\nprices for milk in the market or markets affected by such prices and\nunder varying conditions will be most in the public interest. The\ncommissioner shall take into consideration the balance between\nproduction and consumption of milk, the cost of production and\ndistribution, including compliance with all sanitary regulations in\nforce in the market or markets affected, the cost of feeding stuffs used\nin the production of milk, the supply of milk in such market and the\npurchasing power and welfare of the public. The commissioner shall fix\nprices to producers on the basis of the use thereof in the various\nclasses, grades and forms. Any prices fixed or approved by the\ncommissioner shall be deemed to be prima facie reasonable.\n 4. In determining the approval or request for an order as herein\nprovided or the termination thereof on the part of producers the\ncommissioner shall consider the approval, request or favor in respect\nthereto by any bona fide cooperative association of producers engaged in\nmarketing milk within such marketing area as the approval, request or\nfavor either of making an order or of termination thereof of the\nproducers who are under contract with such cooperative association of\nproducers.\n The commissioner shall appoint a referendum advisory committee to\nassist and advise him in the conduct of the referendum. Such committee\nshall review referendum procedures and the tabulation of results, and\nshall advise the commissioner of its findings. A record of the\ncommittee's advice, recommendations and findings shall be kept and made\navailable to any person upon request. The final certification of the\nreferendum results shall be made by the commissioner. The committee\nshall consist of three members. One member shall be appointed from at\nleast three nominations of producers submitted by the producers\nbargaining agency, one shall be an independent producer, and one shall\nbe appointed from at least three nominations of producers submitted by\nany general farm organization. The members of the committee shall not\nreceive a salary but shall be entitled to actual and reasonable expenses\nin the performance of their duties.\n 5. Marketing agreements. It shall be lawful for a producers'\nbargaining agency of the production area supplying a marketing area and\na distributors' bargaining agency for such marketing area to enter into\nmarketing agreements as to the prices to be paid by distributors to\nproducers for milk sold or otherwise utilized in said marketing area, as\nto rules and regulations covering the method of determining the\nproportion of the product of the entire dairy herd of a producer which\nshall be accepted and paid for pursuant to such price or prices, as to\nreasonable trade practices affecting the relations between producers and\ndistributors in such market. Such agreement may also contain provisions\nfor a committee to administer the provisions of said marketing\nagreement. No agreement, however, shall be effective until a copy\nthereof signed by all persons parties thereto shall have been filed with\nthe commissioner.\n If the commissioner shall have reason to believe that any such\nmarketing agreement results in a monopoly or restraint of trade to such\nan extent that the price of milk is unduly enhanced by reason thereof,\nhe shall serve upon the parties to such agreement a complaint stating\nhis charge in that respect, to which complaint shall be attached or\ncontained therein a notice of hearing specifying a date and place, not\nless than thirty days after the service thereof, requiring the parties\nto such marketing agreement to show cause why an order should not be\nmade directing them to cease and desist from such monopolization or\nrestraint of trade. The parties so complained of may at the time and\nplace so fixed show cause why such order should not be entered. The\nevidence given at such a hearing shall be taken under such rules and\nregulations as the commissioner shall prescribe, reduced to writing and\nmade a part of the record therein. If upon such hearing the commissioner\nshall be of the opinion that such marketing agreement results in\nmonopoly or restraint of trade to such an extent that the price of milk\nin the marketing area affected by such agreement is unduly enhanced, he\nshall issue and cause to be served upon the parties to said agreement an\norder reciting the facts found by him and directing them to cease and\ndesist from such undue enhancement of prices. If such order is not\nobeyed by the parties to such agreement, the commissioner shall file\nwith the attorney-general a certified copy of the order, evidence of\nsuch disobedience and all of the records in the proceeding, and the\nattorney-general may apply to the supreme court for an order or decree\naffirming, modifying or setting aside such order or for making such\nother order or decree as the court may deem equitable in the premises.\n Upon application of the parties to said marketing agreement and after\na hearing, as provided in subdivision one of this section, the\ncommissioner may by order make the provisions of said marketing\nagreement, relative to prices to producers and other provisions thereof,\neffective as to all producers, distributors and handlers in said market\nnotwithstanding that they may not have approved of said agreement if he\nshall find that the terms and conditions of said agreement are fair,\nequitable and in public interest, that the agreement has been fairly\nentered into without fraud, that public interest so requires, in order\nto effectuate the declaration of policy contained in section two hundred\nfifty-eight-k of this chapter, that the proportion of the producers and\ndistributors who have executed such agreement or shall have approved\nsame upon the hearing is equal to that required for an order under\nsubdivision one of this section, and further provided that the\ncommissioner shall determine that the prices set forth in said marketing\nagreement are reasonable and proper prices, as required by this section\nfor prices fixed by an order of the commissioner. Any order so issued\nshall terminate effective on the last day of the current month, and in\nthe same manner and upon the same request after a hearing, as provided\nfor the termination of an order in subdivision one of this section.\n 6. If approved by sixty-six and two-thirds per centum of the producers\naffected voting individually or through their cooperative in the\nreferendum, any order or marketing agreement fixing the price to\nproducers under either subdivision one or subdivision five of this\nsection for market or markets, may provide for an equalization of prices\nto all producers of the production area of the market affected so that\neach producer or co-operative association shall receive the same base\nprice for all milk delivered subject to reasonable differentials for\nquality and location and for services. Any such order may contain\nprovisions requiring from persons who bring milk or cream into the\nmarketing area regulated by such order payments on all such milk or\ncream whenever such persons are not otherwise regulated by the order.\n In order to effect such equalization of prices to producers the\ncommissioner shall require a monthly report from each dealer receiving\nmilk from producers for such market showing the disposition of all milk\nhandled by the reporting dealer in such market and shall thereafter\nrequire payment by each dealer, to a trust company designated as a\nfiscal agent by the commissioner, of any amount by which the sum\notherwise due by such dealer to its producers in accordance with the\nprices fixed by such order exceeds the equalized base price as\ndetermined by the commissioner from such reports, which amounts so paid\nto said fiscal agent, the commissioner shall direct it to pay to those\ndealers whose reports show that the base prices they will pay their\nproducers in accordance with such order are less than the equalized base\nprice as so determined by the commissioner, for repayment in turn by\nsuch dealers to their producers so as to bring all lower rates of\npayment up to the equalized base price. Such payments to said fiscal\nagents shall not be deemed to be state funds. Such equalization shall\ninclude milk of all grades and produced by all breeds of cows, and may\ninclude milk, approved by a board or boards of health having\njurisdiction in a marketing area designated in an order under this\nsection, which was produced by a dealer.\n The provisions of this subdivision shall not become operative as to\nthe New York state metropolitan market production area, however, until\npursuant to federal or state statutes, or by action of authorities duly\nconstituted and authorized thereunder, prices to producers are so\nequalized and made effective throughout all the production area of the\nNew York state metropolitan market area.\n 7. After the commissioner shall have fixed prices in any area or\napproved prices in a marketing agreement to be charged or paid for milk\nin any form included in the definition of milk as used in this article\nwhether by class, grade or use, it shall be unlawful for a milk dealer\nto buy or offer to buy milk at any price less than such price or prices\nas shall be applicable to the particular transaction, and no method or\ndevice shall be lawful whereby milk is bought or sold or offered to be\nbought or sold at a price less than such price, or prices, as shall be\napplicable to the particular transaction, whether by a discount or\nrebate, or free service, or advertising allowance, or a combined price\nfor such milk together with another commodity or commodities, or service\nor services, which is less than the aggregate of the prices for the milk\nand the price or prices for such other commodity or commodities, or\nservice or services, when sold or offered for sale separately or\notherwise.\n 8. It is the intent of the legislature that the instant, whenever that\nmay be, that the handling within the state by a milk dealer of milk\nproduced outside of the state becomes a subject of regulation by the\nstate, in the exercise of its police powers, the restrictions set forth\nin this article respecting such milk so produced shall apply and the\npowers conferred by this article shall attach.\n 9. No marketing agreement or order shall prevent a cooperative\nassociation from blending as heretofore the proceeds of all sales and\ndistributing to its producers the resultant blended price subject to\ndeductions and differentials as provided by its contracts with its\nproducers, but no such cooperative association shall sell milk at prices\nlower than the prices fixed by the commissioner in an order for the\nmarkets affected.\n 10. Any marketing agreement or order of the commissioner may provide\nfor necessary deductions from payments to producers to cover the cost of\nadministering such marketing agreement or order, including the cost of\nauditing milk dealers' classifications, and the cost of other services\nto producers. The funds so derived from such deductions shall be\ndeposited in an account within the miscellaneous special revenue fund\nand shall not be deemed to be state funds. The commissioner may, in his\nor her discretion, appoint an administrator and such assistant\nadministrators as in his or her opinion may be necessary to administer\nthe terms of any agreement or order, and the persons so appointed shall\nbe deemed to occupy positions confidential to the commissioner and may\nbe appointed without competitive examination. All other persons employed\nby the commissioner in the administration of such a marketing agreement\nor order shall be selected in accordance with the civil service law and\nrules.\n 11. Any marketing agreement or order of the commissioner may provide\n(a) for payments to cooperative associations of producers in cases where\nthe commissioner finds that such associations are actually rendering\nmarketing services to producers under contract with them, which services\nenure to the benefit of all producers in the market or to the benefit of\nthe market as a whole and may include the conduct and maintenance,\njointly with other cooperative associations, of plans or campaigns, by\nadvertisement or otherwise, including participation in similar regional\nor national plans or campaigns, to promote the increased consumption of\nmilk and milk products, to acquaint the public with the dietary\nadvantages of milk and milk products and with the economy in the diet,\nand to command, for milk and dairy products, consumer attention\nconsistent with their importance and value, or that such associations\nare rendering services in the control and disposition of surplus for the\nbenefit of the market; (b) for payment to milk dealers or to cooperative\nassociations of producers which operate milk receiving stations or\nmanufacturing plants for services rendered by them, in the stabilizing\nof the supply of fluid milk and cream within the market at times either\nof surplus or of shortage of milk; and (c) for adjustments in payments\nto producers to effect a more favorable seasonal balance as between the\nproduction and consumption of milk. Such adjustments may be made in the\nform of deductions and additions to the fund to equalize prices of milk\nto producers, or by apportioning among producers the total value of all\nmilk subject to equalization on the basis of their marketings of milk\nduring a representative period of time. Any such deductions from the\nfund to equalize prices shall not be deemed to be state funds. Such\nmoneys shall be held in reserve and used solely for additions to the\nfund to equalize prices, in such manner as the order may provide. The\ncommissioner shall make no provision for adjustment in payments under\nthis section with respect to a state milk marketing order, except on the\npetition of a producers' bargaining agency of a production area\nsupplying a marketing area and after a public hearing and subsequent\nproducer approval as required by this section.\n 12. "Distributor" as used in this and the preceding section means a\nmilk dealer as defined in this article who delivers milk to stores\nand/or consumers within the marketing area, from a milk depot or milk\nplant owned and/or operated by such dealer.\n