SECTIONS 62560-62574 - California Statutes

FOOD AND AGRICULTURAL CODE

SECTION 62560-62574

62560. (a) The security charges provided for in Section 62561 shall
be collected until January 1, 2007. Unless otherwise permitted by
this section, the secretary shall thereafter discontinue collection
of the security charges. The fund shall consist of the security
charges collected, the value of any alternative financial instrument,
and acceptable securities provided by handlers pursuant to
subdivision (c).
(b) If, after January 1, 2007, payment of producer claims reduces
the fund cash below thirty million dollars ($30,000,000), the
secretary may resume collecting security charges in order that the
fund cash is thereafter maintained at thirty million dollars
($30,000,000). Security charges necessary to return the fund cash to
thirty million dollars ($30,000,000) shall, subject to subdivision
(c), be collected from all handlers making purchases of milk,
including handlers who have posted acceptable securities pursuant to
subdivision (c).
(c) If, in any month, 110 percent of any handler's average monthly
milk purchases, computed over the preceding 12 months, unless the
increase in value of milk purchases is the result of substantial
business expansion or the result of a merger or acquisition, in which
case the 12-month computation requirement does not apply, exceeds
the fund cash as of the end of that month, or thirty million dollars
($30,000,000) whichever is higher, the secretary shall require that
handler to provide acceptable securities within 10 working days in an
amount equal to the difference between the fund cash or thirty
million dollars ($30,000,000) whichever is higher, and 110 percent of
that handler's average monthly milk purchases. When handlers have
provided acceptable securities covering the difference, the secretary
shall not collect security charges from those handlers for the
portion of their average monthly milk purchases covered by acceptable
securities. Shipments to handlers failing to provide acceptable
securities within 10 working days of notice by the secretary of the
obligation to post acceptable securities, as required by this
subdivision, shall be listed by the secretary as ineligible for
coverage under the fund pursuant to Section 62586.
(d) The secretary shall calculate the value of milk handlers'
average monthly milk purchases at least once each year for those
handlers whose previous average monthly milk purchases exceed twenty
million dollars ($20,000,000). If, as a result of any such
calculation, the secretary determines that a handler must provide
additional acceptable securities to satisfy the requirements of
subdivision (c), that handler shall provide additional acceptable
securities within 10 working days of notice by the secretary.
(e) In the event a handler fails to comply with subdivision (d):
(1) In addition to paying all other amounts required by this
chapter, including any security charges then in effect under
subdivision (a) of Section 62561, that handler shall pay an enhanced
security charge on all purchased milk to be computed as follows:
(A) (i) One and seven-tenths mills per pound ($0.0017) for class 1
fat.
(ii) Nine-tenths mills per pound ($0.0009) for class 1
solids-not-fat.
(iii) One-tenth mill per pound ($0.0001) for class 1 fluid.
(B) (i) Three and two-tenths mills per pound ($0.0032) for classes
2, 3, 4a, and 4b fat.
(ii) One and three-tenths mills per pound ($0.0013) for classes 2,
3, 4a, and 4b solids-not-fat.
(2) A handler shall be liable for the enhanced security charges
required by this section until the handler provides the required
additional acceptable securities to the secretary. Notwithstanding
Section 62521 and subdivision (b) of this section, enhanced security
charges paid pursuant to this paragraph shall be deposited into the
trust fund and become part of the fund cash.
(f) If a handler fails to timely provide acceptable securities, or
additional acceptable securities, as required by this section, the
secretary shall promptly give notice of that fact to all producers
who have a contract on file with the secretary, all cooperative
associations, and other interested parties. A handler failing to post
acceptable securities may also be subject to revocation, suspension,
or nonrenewal or placement of conditions upon the milk handler's
license pursuant to Sections 62146, 62149, and 62151.
(g) In consultation with the Milk Producers Security Trust Fund
Advisory Board, the secretary may consider and use alternative
financial instruments, in addition to, or in lieu of, using security
charges to meet the financial security requirements of this section.

62561. (a) The following security charges shall be in effect for
any period for which the secretary has implemented collections under
this chapter:
(1) (A) One and seven-tenths mills per pound ($0.0017) for class 1
fat.
(B) Nine-tenths mills per pound ($0.0009) for class 1
solids-not-fat.
(C) One-tenth mill per pound ($0.0001) for class 1 fluid.
(2) (A) Three and two-tenths mills per pound ($0.0032) for classes
2, 3, 4a, and 4b fat.
(B) One and three-tenths mills per pound ($0.0013) for classes 2,
3, 4a, and 4b solids-not-fat.
(b) The secretary shall add the security charges to the prices
established for all classes of milk in accordance with Chapter 2
(commencing with Section 61801). The secretary is only authorized by
this article to collect security charges on covered milk.

62562. Any increase in classified prices due to Section 62561 shall
be considered as part of the minimum prices required to be paid to
producers under other provisions of this code. No other provisions of
this chapter modify the minimum payment requirements contained in
Chapter 1 (commencing with Section 61301) and Chapter 2 (commencing
with Section 61801).

62563. Any handler subject to any pooling plan in effect under
Chapter 3 (commencing with Section 62700) shall continue to be
obligated for the minimum prices provided for in the stabilization
and marketing plans on the pooled usage of the handler. However, any
part of the minimum prices that is attributable to the security
charges established pursuant to Section 62561 shall be deducted
before producer prices are determined under the pooling plan.
Any handler subject to the pooling plan that receives milk that is
not included in the calculation of producer prices determined under
the pooling plan shall be obligated to pay the security charges
established pursuant to Section 62561 for any portion of that milk
that is assigned to class 1, class 2, class 3, class 4a, and class 4b
usage.
The amount of any handler's obligation attributable to the
security charges established pursuant to Section 62561 shall be
remitted by the secretary to the fund by the end of the month
following the month the pool calculations were completed.

62564. Any handler receiving milk not subject to any pooling plan
in effect pursuant to Chapter 3 (commencing with Section 62700) shall
be obligated to remit to the secretary any security charges in
effect pursuant to Section 62561 for class 1, class 2, class 3, class
4a, and class 4b products produced from the milk and may deduct the
security charges from the minimum prices required to be paid to
producers.

62564.5. Any producer-handler who has milk production that is
exempt pursuant to Section 62708, 62708.1, 62708.5, or 62722 from the
pooling plan in effect pursuant to Chapter 3 (commencing with
Section 62700) shall be exempt from any security charges established
pursuant to this article for that exempt production.

62565. Security charges may be collected by the director through
direct payment or through pool accounting procedures established by
the director pursuant to Chapter 3 (commencing with Section 62700).

62566. The director may add a penalty of 10 percent to amounts
which are not paid when due.

62567. If any handler or producer-handler does not provide the
information necessary to determine the amount due, when required, the
director shall estimate the amount due from the records of the
department or from any other source of information which is
available.

62568. The director may take all appropriate action against any
person to recover any unpaid amounts. In any action, a declaration by
the director which states the amount required to be paid, including
penalty, is prima facie evidence of the delinquency. The presumption
established by this section is a presumption affecting the burden of
proof.

62569. Any money which is collected by the director pursuant to
this chapter shall be deposited in a bank or other depository which
is approved by the director. Funds which are so collected are exempt
from Sections 11270 and 11272 of the Government Code and shall be
deposited and disbursed only to pay for milk produced and delivered
within this state, which has not been otherwise paid for, including
pool equalization fund obligations, attorney's fees and other costs
incurred in litigation involving the fund, expenses generated by the
auditing requirement imposed by Section 62570, expenses generated by
the use of alternative financial instruments pursuant to Section
62560, and for the costs set forth in Section 62573. The expenditure
of those funds is exempt from Section 925.6 of the Government Code.
Nothing in this section prevents the director from using the
increment received from investment, reinvestment, or deposit of money
specified in Section 62573, in the manner provided by Section 62574.

62570. All fund activities shall be subject to an audit at least
once every two years by an auditing firm recommended by the board and
selected by the director. A copy of the audit shall be delivered to
the director within 30 days after completion.

62571. Notwithstanding Section 13340 of the Government Code, any
money which is collected by the director pursuant to this chapter is
hereby continuously appropriated to the director to carry out only
those purposes provided for in Section 62569. The appropriation which
is made in this section is exempt from Section 16304 of the
Government Code.

62572. Any money which is deposited pursuant to Section 62569,
which the director determines is available for investment, may be
invested or reinvested by the Treasurer in any of the securities
described in Article 1 (commencing with Section 16430) of Chapter 3
of Part 2 of Division 4 of Title 2 of the Government Code, or placed
in a depository as provided in Chapter 4 (commencing with Section
16500) of that part, and handled in the same manner as money in the
State Treasury. For these purposes, the money may also be combined
with funds determined by the director to be available for investment
pursuant to Section 58939.

62573. Any increment which is received from investment,
reinvestment, or deposit of money pursuant to Section 62572 shall be
deposited to the credit of the fund. The Treasurer may deduct from
this remittance an amount equal to the reasonable costs incurred in
carrying out Section 62572 and this section or may bill the director
for the costs, and the director shall pay the costs from money
collected pursuant to this chapter.
Nothing in this section prevents the director from using the
increment in a manner provided by Section 62574.

62574. Immediately following the payment to the fund of the
increment provided in Section 62573, if the secretary determines that
there is a fund surplus, the secretary may, after consultation with
the Trust Fund Board, transfer an amount equal to the increment
referenced in the section to an account administered by the Dairy
Marketing Branch of the department to be used to reduce the producer
and handler assessments that would otherwise be imposed pursuant to
Article 14 (commencing with Section 62211) of Chapter 2. One-half of
the increment so transferred shall be used to reduce the obligation
of producers and one-half shall be used to reduce the obligation of
handlers pursuant to that article.