H.865

AN ACT RELATING TO VERMONT MILK COMMISSION

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1.  Sec. 4 of No. 50 of the Acts of 2007 is amended to read:

Sec. 4.  VERMONT MILK COMMISSION ESTABLISHMENT OF A

              MINIMUM PRODUCER PRICE

(a)  The Vermont milk commission shall establish by rule order pursuant to its authority under chapter 161 of Title 6 a minimum producer price that is designed to achieve a price by which the cost of picking up the milk and hauling the milk from the farm to the purchaser will be paid by the purchaser reflect the cost of production. 

(b)  The cost of picking up the milk and hauling the milk from the farm to the purchaser will be paid by the purchaser.  Notwithstanding 6 V.S.A. § 2925(d), hauling and stop charges of milk loaded at the farm shall not be charged back to the selling dairy farmer.  No additional charges shall be made, and no costs may be shifted from other benefits the farmer receives to contravene the purpose of this act.  Nor shall any funds be transferred away from the farmer in paid producer differentials or any premiums the farmer would receive, but for this act.

Sec. 2.  Sec. 6(c) of No. 50 of the Acts of 2007 is amended to read:

(c)  The milk commission shall commence the rulemaking process necessary to implement the provisions of Sec. 4 of this act within 60 days of the effective date of this act.  The rule order shall take effect when, by rule, legislation, or other agreement, New York and one other state in the Northeast Marketing Area, Federal Order 1, have accomplished the purpose of Sec. 4 of this act or on January 15, 2009 July 1, 2010, whichever comes first.

Sec. 3.  6 V.S.A. § 2922 is amended to read:

§ 2922.  VERMONT MILK COMMISSION; MEMBERSHIP

(a)  There shall be a Vermont milk commission, to consist of seven nine members, one member of which shall be the secretary of agriculture, food and markets.  The secretary shall be chair of the commission and serve without compensation.  A quorum shall be a majority of the commission.  The commission shall act only by an affirmative vote of at least six members.  The remaining commission members shall serve for terms of three years, except for the legislative members who shall serve for the term of their election, and be chosen as follows:

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(5)  One member from the house committee on agriculture chosen by the speaker and one member from the senate committee on agriculture chosen by the president pro tempore of the senate.  For attendance at a meeting when the general assembly is not in session, these two legislative members shall be entitled to the same per diem compensation and reimbursement of necessary expenses as provided members of standing committees under 2 V.S.A. § 406.

(b)  All expenditures under this subchapter shall be paid from the receipts hereunder.

Sec. 4.  6 V.S.A. § 2923 is amended to read:

§ 2923.  ADMINISTRATIVE WORK

The Vermont agency of agriculture, food and markets shall perform the administrative work of the commission as directed by the commission.  The commission shall may reimburse the agency of agriculture, food and markets for the cost of services performed by the department agency.  The commission may enter into contracts with and employ technical experts and authorize and retain legal counsel, and other such officers, agents, and employees as are necessary to effect the purposes of this chapter, and may fix their qualifications, duties, and compensation.  The contract remuneration and employment compensation shall be paid from the Vermont milk commission fund and shall be subject to the limitations of section 2924 of this chapter.

Sec. 5.  6 V.S.A. § 2924 is amended to read:

§ 2924.  POWERS AND DUTIES; PRICING AUTHORITY; PUBLIC

               HEARINGS

(a)  Authority over milk prices.  The commission may establish an equitable minimum or maximum price, or both, and the manner of payments, which shall be paid producers or associations of producers by handlers, and the prices charged consumers and others for fluid milk used in dairy products by distributors or handlers.

(b)  Equitable minimum producer prices.  The commission may establish by rule order after notice and hearing an equitable minimum price to be paid to dairy producers for milk produced in Vermont on the basis of the use thereof in the various classes, grades, and forms.  Because of the need to react immediately to changing market conditions and prices, an equitable minimum price may be established by emergency rule.  Prices so established which exceed federal order prices shall be collected by the commission from the handlers for distribution to dairy producers as a blend price.  The cost of the contracts and employment pursuant to section 2923 of this title and of administering the collection and distribution of these moneys shall be covered by such moneys, not to exceed $50,000.00 $100,000.00.

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(c)  Public hearings.  In order to be informed of the status of the state's dairy industry, the commission shall hold a public hearing:

(1)  At least annually.

(2)  Whenever the price paid to producers in Vermont, including the federal market order price and any over-order premiums, on average, has been reduced $0.50 or more for the previous month, except when such increase is attributable to normal seasonal changes in price by five percent or more over the last month or by 10 percent or more over the last three months.

(3)  Whenever the retail price, on average, has increased by more than $0.08 10 percent per gallon within a three-month period or $0.32 15 percent per gallon within a 12-month period.

(4)  Whenever the cost of production increases by 10 percent or more within a period of 3 to 12 months.

(5)  Whenever a loss or substantial lessening of the supply of fluid dairy products of proper quality in a specified market has occurred or is likely to occur and that the public health is menaced, jeopardized, or likely to be impaired or deteriorated by the loss or substantial lessening of the supply of fluid dairy products of proper quality in a specified market.

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(e)  Premiums on handlers and distributors for milk used in dairy products sold at retail in Vermont.  The commission may assess a premium on handlers and distributors for milk used in dairy products sold at retail in Vermont.  The premiums assessed and received shall be paid to the state treasury and deposited in the special fund established pursuant to section 2938 of this chapter.  The proceeds of the premium shall be distributed to dairy producers as a blend price.  Any applicable provision of subsections 2925(b)-(f) of this title shall apply to the assessment of such premiums.  In assessing these premiums, the commission shall also take into account any similar assessments made by other New England states.

Sec. 6.  6 V.S.A. § 2925 is amended to read:

§ 2925.  MINIMUM PRODUCER PRICE REGULATION

(a)  The commission may make, rescind, or amend a rule an order regulating minimum producer prices if the commission finds that the federal milk marketing order minimum price is adequate or inadequate as the case may be to ensure that the price paid to dairy producers will cover the costs of milk production and provide a reasonable economic return to dairy producers sufficient to ensure a stable milk production and distribution system in Vermont.  The commission may amend or rescind a rule without a public hearing when necessary to conform the price with an increase in the federal market order price.

(b)  Guidelines for setting prices.  In setting equitable minimum prices, the commission may investigate and ascertain what are reasonable costs and charges for producing, hauling, handling, processing and any other services performed in respect to fluid dairy products.  The board commission shall take into consideration the balance between production and consumption of milk dairy products, the costs of production and distribution, the purchasing power of the public and the price necessary to yield a reasonable return to the producer producers, handlers, and to the distributors.

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(2)  Minimum retail prices should reflect the lowest price at which milk purchased from Vermont producers can be received, processed, packaged, and distributed by handlers and distributors at a just and reasonable return.

(3)  In establishing minimum producer and retail prices, the commission shall make applicable findings regarding the competitive position of Vermont producers and their costs, handler and distributor costs, and reasonable rates of return, and actual handler and distributor rates of return.

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(e)  Purchases by or sales to authorized officials of any town or city charity or public welfare department or by charitable organizations approved by the city or town officials for charitable uses, and school lunch milk, shall be exempt from the price-fixing provisions of this chapter.

(f)  This chapter shall apply to milk produced outside the state subject to regulation by the state in the exercise of its constitutional police powers.  Any sale or purchase by distributors or handlers of such milk within this state at a price less than a regulated minimum price shall be unlawful.

(g)  This section shall not apply to a producer-handler with an annual production of one million pounds of milk or less.

Sec. 7.  6 V.S.A. § 2929 is amended to read:

§ 2929.  POWER TO MAKE ORDERS AND CONDUCT HEARINGS;

               REGULATIONS

(a)  In administering this section and sections 2675, 2725, 2726, 2921-2928, and 2931-2933 of this title chapter, the commission shall have the power to make orders hereunder, conduct hearings, subpoena, and examine under oath producers, handlers, and distributors, their books, records, documents, correspondence, and accounts, and any other person it deems necessary to carry out the purposes and intent of said sections this chapter.

(b)  Any order issued under this chapter shall only be made final after a public hearing and after publication of a proposed order for public review and comment for 30 days following the publication of the proposed order.

(1)  The commission shall provide notice of the hearing on the proposed order to interested persons in accordance with the applicable provisions of 3 V.S.A. § 809(b), and to the public by advertisement in the newspapers of record approved by the secretary of state under 3 V.S.A. § 839(d).  The notice shall include proposed regulatory procedures for administration of the pricing order, as appropriate, and otherwise provide sufficient notice and explanation of the potential operation and impact of the order, including proposed findings and conclusions consistent with the requirements of section 2925 of this chapter.

(2)  Interested persons shall not be considered “parties” and, except as otherwise specifically provided by subsection (c) of this section, the provisions of 3 V.S. A. chapter 25 relating to contested cases shall not apply to the procedure for the conduct of the hearing, the issuance of a proposed pricing order, or the promulgation of a final order.  The hearing on the proposed order shall be held in accordance with the applicable provisions of 3 V.S.A. § 840(c) and (d), other than the provisions therein relating to notice and the requirements of 3 V.S.A. § 832a.   The hearing procedure shall provide for the establishment of a formal record of sworn evidence received, matters officially noticed, questions and offers of proof submitted by interested persons, and any proposed findings presented.

(3)  The final order shall contain separate findings of fact and conclusions responsive to the requirements of section 2925 of this chapter and based exclusively on the evidence presented at the hearing and on matters officially noticed.  The final order shall also provide specific response to any submissions filed by interested persons, including proposed findings.  The final order shall be issued again in accordance with the procedural requirements of subdivision (1) of this subsection.

(4)  The commission shall hold at least one formal deliberative meeting before the issuance of a proposed or final order.  Except as provided in section 2299 of this chapter with respect to affirmative votes, a majority of the commission shall constitute a quorum for these deliberative meetings, as well as for any hearing conducted in accordance with this section.

(c)  The procedure relating to ex parte communications set forth in 3 V.S.A. § 813 shall apply as the commission deems appropriate to the development of a proposed order and to the deliberation and issuance of a final order.

(d)  The commission shall adopt rules of procedure for the conduct of a hearing and issuance of a proposed and final pricing order under this chapter. Such rules may be adopted as emergency rules in accordance with 3 V.S.A.  chapter 25.  The commission may adopt, promulgate and enforce such reasonable rules, and regulations and procedures as are deemed necessary to carry out the administration of the provisions of this section and sections 2675, 2725, 2726, 2921-2928 and 2931-2933 of this title chapter.

Sec. 8.  6 V.S.A. § 2931(a) is amended to read:

(a)  Within 20 days after any final order or decision has been made by the commission, any party to the action or proceeding before the commission, or any person directly affected thereby, may apply for a rehearing in respect to any matter determined in the action or proceeding, or covered or included in the order, specifying in the motion for rehearing the ground therefor.  The commission may grant such rehearing if in its opinion good reason therefore is stated in such motion.

Sec. 9.  6 V.S.A. § 2932 is amended to read:

§ 2932.  DETERMINATION OF MOTION FOR REHEARING

Upon the filing of a motion for rehearing, the commission shall within ten days, either grant or deny the motion, or suspend the order or decision complained of pending further consideration, and any order of suspension may be upon terms and conditions prescribed by the commission.

Sec. 10.  6 V.S.A. § 2938 is added to read:

§ 2938.  FUND ESTABLISHED

The Vermont milk commission fund is established in the state treasury and shall be administered by the secretary of agriculture, food and markets in accordance with the provisions of subchapter 5 of chapter 7 of Title 32, except that interest earned on the fund shall be retained in the fund.  Proceeds from this chapter shall be deposited into the fund.  The fund shall be used as necessary for the purposes of this chapter.  The treasurer shall distribute funds as directed by the commission.

Sec. 11.  6 V.S.A. § 2723a(a) is amended to read:

(a)  It shall be unlawful for any person to distribute fluid dairy products as a distributor, as defined in this chapter, without a license issued by the commissioner secretary.  The commissioner secretary shall license all distributors annually.  Application for the license shall be made to the commissioner secretary upon a form furnished by the commissioner secretary.  The application shall be accompanied by an annual license fee of $15.00 for one year or any part thereof.  The license period shall be from January 1 to December 31.

Sec. 12.  6 V.S.A. § 2981(b) is amended to read:

(b)  Each distributor handler shall pay the Vermont milk commission council each month two cents per hundredweight on all fluid milk sold for consumption within the state of Vermont.  Each distributor handler shall file a report and pay the distributor's handler’s hundredweight fee to the commission council on forms provided for that purpose, except that distributors handlers who sell less than 100 quarts of fluid milk per day may file reports and pay the prescribed hundredweight fees at the end of each three-month period.  In case the same fluid milk is handled by more than one distributor handler, the first distributor handler within the state dealing in or handling the fluid milk shall be the distributor handler within the meaning of this chapter.

Sec. 13.  REPEAL

6 V.S.A. §§ 2928, 2930, 2951, and 2987(b) are repealed.

Sec. 14.  EFFECTIVE DATE

This act shall take effect on passage.