SECTIONS 62520-62521 - California Statutes

FOOD AND AGRICULTURAL CODE

SECTION 62520-62521

62520. Unless otherwise defined in this chapter, or the context
otherwise requires, the definitions contained in Chapter 1
(commencing with Section 61301), Chapter 2 (commencing with Section
61801), or Chapter 3 (commencing with Section 62700) govern the
construction of this chapter.

62521. For purposes of this chapter, the following terms mean:
(a) (1) "Acceptable security" means a surety bond from an admitted
insurer, deposits of government securities, a letter of credit, or
other form of performance guarantee acceptable to the secretary and
meeting the requirements as acceptable security pursuant to law. Any
instrument used as acceptable security shall contain provisions the
secretary may prescribe, shall have an effective life of no less than
two years, shall name the secretary as the beneficiary of the
instrument, shall be clean and irrevocable if the security is a
letter of credit, shall provide that the secretary may draw upon it
up to the total amount in the event of the handler's payment default,
and, except as otherwise provided in paragraph (3), shall be
verified to the secretary as being in effect and complying with the
provisions of this chapter at the end of every six-month interval
following the date on which a handler originally posts the
instrument. Except as provided in paragraphs (2) and (3), acceptable
securities provided to the secretary shall not be released by the
secretary unless the handler's average monthly purchases, as
determined annually by the secretary, fall below thirty million
dollars ($30,000,000), or the fund cash, whichever is higher. Any
interest accrued by the instrument shall be the property, and for the
benefit, of the handler posting the instrument.
(2) Subject to the provisions of this chapter, a handler who has
posted an acceptable security shall have the right to replace that
instrument with a new acceptable security meeting the requirements of
this chapter at the end of every six-month interval following the
date on which the handler originally posted the instrument. The
secretary shall release the issuer of any acceptable security from
all past, present, or future obligations secured by the acceptable
security upon the secretary's acceptance of replacement security
meeting the requirements of this chapter and the secretary shall then
provide written confirmation to the issuer of the original
acceptable security that an acceptable replacement security had been
provided.
(3) Upon receipt of an affidavit confirming that the amount paid
under an acceptable security posted pursuant to this chapter was
equal to the total amount of that instrument, the secretary shall
release the issuer of that acceptable security from all past,
present, and future liability. Upon receipt of an affidavit
confirming any other amount paid by an issuer under an acceptable
security posted pursuant to this chapter, the secretary shall release
the issuer of that security to the extent of the issuer's payment.
(b) "Board" means the Milk Producers Security Trust Fund Board.
(c) "Covered milk" means milk that would, in the event of a
default in payment by the purchasing handler, qualify for coverage
under Article 5 (commencing with Section 62580) of Chapter 2.5 of
Part 3.
(d) "Fund" means the Milk Producers Security Trust Fund created
pursuant to Section 62506.
(e) "Fund cash" means the combined value of the security charges
collected pursuant to Section 62561 and any increments received
pursuant to Section 62573.
(f) (1) Except as provided in paragraph (2), "fund surplus" means
the portion of fund cash at any particular time that consists of
increments received by the fund pursuant to Section 62573.
(2) If payment of producer claims pursuant to Article 7
(commencing with Section 62620) reduces the fund cash to thirty
million dollars ($30,000,000), "fund surplus" shall thereafter mean
the amount by which the fund cash exceeds thirty million dollars
($30,000,000).
(g) "Handler" means any person who as owner, agent, broker, or
intermediary, either directly or indirectly, receives, purchases, or
otherwise acquires ownership, possession, or control of milk in
unprocessed or bulk form from a producer or a producer-handler for
the purpose of manufacturing, processing, selling, or other handling.
It includes cooperative associations that, either directly or
indirectly, receive, purchase, or otherwise acquire ownership,
possession, or control of milk from other handlers or producers who
are nonmembers of the cooperative.
(h) "Milk" means bulk whole milk, bulk reduced-fat milk, bulk
lowfat milk, bulk skim milk, bulk condensed skim, and bulk cream, and
any other combination of these products which have not had nondairy
ingredients added. It does not include milk which has been packaged
in bottles, cartons, dispenser cans, or other consumer packages.
(i) "Producer" means any person that produces milk from five or
more cows whose bulk milk is received, acquired, or handled by a
handler. It includes the nonprofit cooperative associations described
in Article 3 (commencing with Section 61871) of Chapter 2 in the
sale of milk of its member producers to other handlers.