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AMENDED
May 4, 2004
H. 5111
Introduced by Reps. Witherspoon, Frye, McLeod, Coleman, Bailey, Martin, Lourie, Townsend, Sinclair, Barfield, Cobb-Hunter, Rutherford, Mack, Rhoad, Ott, Duncan, J.H. Neal, Emory, J.M. Neal, Whitmire, Thompson, Cooper, Anthony, Bales, Bowers, R. Brown, Clemmons, Coates, Davenport, Freeman, Govan, Herbkersman, J. Hines, Hosey, Jennings, Keegan, Kennedy, Koon, Lee, Limehouse, Loftis, Neilson, Pinson, M.A. Pitts, Rivers, Sandifer, F.N. Smith, G.M. Smith, Snow, Talley, Taylor, Toole, Umphlett, Weeks, Whipper and White
S. Printed 5/4/04--H.
Read the first time April 14, 2004.
TO AMEND THE CODE OF LAWS OF SOUTH CAROLINA, 1976, BY ADDING CHAPTER 34 TO TITLE 39 SO AS TO ENACT THE "SOUTH CAROLINA DAIRY STABILIZATION ACT", TO ESTABLISH THE SOUTH CAROLINA MILK BOARD, TO PROVIDE FOR ITS MEMBERS, PROCEDURES FOR THEIR APPOINTMENT AND FOR THEIR POWERS AND DUTIES; TO PROVIDE THAT THE BOARD'S PRIMARY DUTY IS TO ESTABLISH A FAIR MARKET BREAKEVEN PRICE FOR PRODUCERS OF MILK AND EXERCISE GENERAL SUPERVISION OVER THE MILK INDUSTRY IN THIS STATE; TO PROVIDE THAT THE BOARD MUST BE LOCATED IN THE SOUTH CAROLINA DEPARTMENT OF AGRICULTURE; TO AUTHORIZE THE BOARD TO ENTER INTO COMPACTS FOR A UNIFORM SYSTEM OF MILK CONTROL, TO CONDUCT INVESTIGATIONS AND MEDIATE AND ARBITRATE MILK DISPUTES, TO ISSUE RULES, ORDERS, AND FAIR MARKET BREAKEVEN MILK PRICES, TO SPECIFY CONDITIONS UNDER WHICH FEES MAY BE COLLECTED WHEN MILK DROPS BELOW THE FAIR MARKET BREAKEVEN PRICE SET BY THE BOARD, AND TO PROVIDE FOR THE COLLECTION AND DISBURSAL OF THESE FEES; TO REQUIRE LICENSURE IN ORDER TO OPERATE AS A MILK BUYER; TO AUTHORIZE THE BOARD TO DEVELOP A SYSTEM OF ACCOUNTING FOR BUYERS OF MILK AND TO SANCTION THOSE BUYERS WHO DO NOT USE THE SYSTEM; AND TO PROVIDE PENALTIES FOR VIOLATIONS OF THIS CHAPTER.
Amend Title To Conform
Be it enacted by the General Assembly of the State of South Carolina:
SECTION 1. Title 39 of the 1976 Code is amended by adding:
Section 39-34-10. This chapter may be cited as the 'South Carolina Dairy Stabilization Act'.
Section 39-34-20. The General Assembly finds that the production, price, and availability of fluid milk to the citizens of this State is of primary importance based upon the health benefits and year-round demand for fresh, safe, high quality fluid milk. As a result of these needs, the General Assembly finds that the formation of a South Carolina Milk Board and the enactment of this 'Dairy Stabilization Act' will safeguard the interests of dairy producers in this State, ensure that dairy producers receive fair market breakeven prices, and to provide consumers a continuous and affordable supply of South Carolina produced fluid milk.
Section 39-34-30. As used in this chapter, the term: (1) 'Affiliate' means a person or subsidiary of a person, who has, either directly or indirectly, actual or legal control over a buyer, whether by stock ownership or in any other manner. (2) 'Books and records' means books, records, accounts, contracts, memoranda, documents, papers, correspondence, or other data pertaining to the business of the person in question. (3) 'Buyer' means a person who purchases, markets, or handles fluid milk directly from a South Carolina producer.
(4) 'Fluid milk' means all milk produced in this State.
(5) 'Consumer' means a person, other than a milk buyer, who purchases milk for human consumption. (6) 'Executive director' means the general manager of the South Carolina Milk Board. (7) 'Health authorities' means the Department of Health and Environmental Control, the Consumer Services Division of the State Department of Agriculture, and the local health departments. (8) 'Licensee' means a licensed milk buyer. (9) 'Member' means a board member of the South Carolina Milk Board.
(10) 'Milk' means the clean lacteal secretion obtained by the complete milking of one or more healthy cows properly fed, housed, and kept, including milk that is cooled, pasteurized, standardized, or otherwise processed.
(11) 'Milk board' means the South Carolina Milk Board. (12) 'Person' means a person, firm, corporation, cooperative, association, or other legal entity. (13) 'Producer' means a person, irrespective of whether the person is also a buyer, who produces fluid milk in this State. (14) 'Producer-buyer' means a buyer who handles only fluid milk that the buyer produces. (15) 'Sanitary regulations' means all laws and ordinances relating to the production, handling, transportation, distribution, and sale of milk and, so far as applicable, the state sanitary code and lawful regulations adopted by the dairy and food divisions or by the board of health of any county or municipality.
(16) 'South Carolina milk' means all milk produced in this State. (17) 'Store' means a grocery store, hotel, restaurant, dairy products store, or any other similar mercantile establishment that sells or distributes milk. (18) 'Subsidiary' means any person over whom or which a buyer or an affiliate of a buyer has, or several buyers collectively have, either directly or indirectly, actual or legal control, whether by stock ownership or in any other manner. (19) 'Fair market breakeven price' means a price determined by, but not limited to, the following factors:
(a) the USDA Class I price of fluid milk;
(b) the location adjustment fee; and
(c) the over-order premium paid by the buyer.
Section 39-34-40. (A) There is created the South Carolina Milk Board consisting of thirteen members, all of whom must be residents of this State; six members must be producers of milk actively engaged in dairy production at the time of selection and throughout the member's term, three of whom must be appointed by the Chairman of the Senate Agriculture and Natural Resources Committee and three appointed by the Chairman of the House of Representatives Agriculture, Natural Resources and Environmental Affairs Committee; two members must be consumers, one of whom must be appointed by the Chairman of the Senate Agriculture and Natural Resources Committee and one appointed by the Chairman of the House of Representatives Agriculture, Natural Resources and Environmental Affairs Committee; two members must be retailers, one of whom must be appointed by the Chairman of the Senate Agriculture and Natural Resources Committee and one appointed by the Chairman of the House of Representatives Agriculture, Natural Resources and Environmental Affairs Committee; two members must be processors, one of whom must be appointed by the Chairman of the Senate Agriculture and Natural Resources Committee and one appointed by the Chairman of the House of Representatives Agriculture, Natural Resources and Environmental Affairs Committee; and one consumer advocate appointed by the Governor. The consumer members must not have any connection financially, or otherwise, with the production or distribution of milk or products derived from milk.
(B) The primary duty of the South Carolina Milk Board is to establish a fair market breakeven price for producers and to exercise general supervision over the state milk industry, for the purpose of protecting the availability and affordability of fluid milk consumed in this State by monitoring the consumption and distribution of South Carolina produced milk. Other duties include the authority to mediate differences between producers, associations, and processors.
(C) Annually the board shall elect a chairman from its members.
(D) An executive director must be appointed by the board and shall serve ex officio, as a nonvoting member of the board. The executive director must not have any connection financially, or otherwise, with the production or distribution of milk or products derived from milk. The executive director, who must be compensated in an amount determined by the board, shall devote full time to the duties of his office. No South Carolina Milk Board member may serve as executive director. The technical and other services for the milk board must be performed, so far as practicable, using existing resources and personnel of the South Carolina Department of Agriculture, the Clemson Agricultural Extension Service, and the Clemson Agricultural Experiment Station, without additional compensation. The executive director, with the advice and consent of the board, may hire and prescribe the duties of additional technical staff and other assistants and employees as may be necessary to carry out the provisions of this chapter. The executive director shall supervise these employees and shall prepare, approve, and submit all requests for appropriations and is responsible for all expenditures of these appropriations.
Section 39-34-60. (A) Members of the milk board shall serve for terms of four years and until their successors are appointed and qualify, except that of those first appointed, three of the producer members, one of the two consumer members, one of the two retailer members, and one of the two processor members shall be appointed for initial terms of two years each, the initial terms of all members to be designated by the appointing officials when making the initial appointments.
(B) Vacancies occurring on the board for any reason shall be filled by appointment in the same manner of original appointment for the remainder of the unexpired term. (C) Members of the board may not receive per diem.
Section 39-34-70. (A) The milk board shall meet monthly or upon the call of the chairman, at such times as the chairman considers necessary, and at such place as may be designated, and seven members of the board constitute a quorum.
(B) To promote active participation by all board members, the board members may, by unanimous vote, make recommendations to the Governor for the dismissal of any member who fails to properly carry out his duties as a member of the board including, but not limited to, absenteeism, and the Governor shall remove such members in accordance with Section 1-3-240. Section 39-34-80. The principal offices of the South Carolina Milk Board must be within the South Carolina Department of Agriculture building. Section 39-34-90. The milk board is an instrumentality of the State, vested with the power to make, adopt, and enforce regulations and issue and enforce orders necessary to carry out the purposes of this chapter. Every order of the milk board must be posted for inspection in the main office of the milk board, and a certified copy filed in the office of the Commissioner of Agriculture. An order, applying only to a person or persons named in the order must be served on the person or persons affected by personal delivery of a certified copy, or by mailing a certified copy in a sealed envelope, with postage prepaid, to each person affected by the order or, in the case of a corporation, to an officer or agent of the corporation upon whom legal process may be served. The posting in the main office of the milk board of any order, not required to be served, and such filing in the office of the Commissioner of Agriculture, constitutes due and sufficient notice to all persons affected by the order. Section 39-34-100. (A) The board may announce, by regulation, the fair market breakeven price to be paid to producers in this State. If the USDA Class I price of fluid milk in this State drops below the fair market breakeven price set by the milk board, the milk board may collect a fee from all buyers of South Carolina milk as determined by a formula published in the regulations promulgated by the milk board. If the Class I price of milk does not drop below the fair market breakeven price, no buyer fee may be collected for that month.
(B) Buyer fees must be collected on all fluid milk produced in this State, and these fees must be collected by the dairy cooperative and remitted to the State Treasurer to be placed in an account separate and distinct from the general fund and entitled the 'Dairy Producers Settlement Fund'. All buyer fees collected in a certain month must be disbursed, based on Class I fluid milk sales, to all producers in this State who sold or shipped milk in the month when prices fell below the fair market breakeven amount as determined by the milk board.
Section 39-34-120. (A) A milk buyer must not engage, either directly or indirectly, in the purchase of South Carolina milk until he has applied for and obtained a license from the milk board. A store is not required to make application for a license but is deemed to be a de facto licensee. The milk board may decline to grant a license or may suspend or revoke a license already granted upon due notice and after a hearing before the milk board if the applicant or licensee has violated regulations issued by the milk board, health and sanitation regulations issued by the Department of Health and Environmental Control, or any provisions of this chapter. (B) The milk board may, in lieu of license suspensions, invoke a penalty of not less than fifty dollars or more than five thousand dollars per offense. The milk board shall pay all penalties collected to the State Treasurer for deposit into an account separate and distinct from the general fund and entitled the 'Dairy Producers Settlement Fund'.
Section 39-34-140. (A) The South Carolina Milk Board shall prepare and promulgate a system of accounting designed to show for each buyer of fluid milk under the supervision of the milk board the total purchases of South Carolina milk by the buyer. The accounting system must be designed to show not only total purchases, but also the sales of milk sold in this State. Upon the promulgation of this system of accounting, each buyer of fluid milk under the supervision of the milk board shall adopt and use this system of accounting. Reports required and submitted under the terms of the Federal Milk Order must satisfy the accounting system requirements of this section. (B) A buyer who violates a provision of this section or who fails or refuses to use the system of accounting or refuses to allow his system to be inspected or audited is guilty of a misdemeanor and, upon conviction, must be fined not more than one thousand dollars or imprisoned not more than sixty days. Each day of violation constitutes a separate offense.
Section 39-34-150. A person who violates a provision of this chapter, except as otherwise provided for in this chapter, or regulations or orders promulgated pursuant to this chapter or of any license issued by the milk board is guilty of a misdemeanor and, upon conviction, must be fined not less than twenty-five dollars or more than two hundred dollars or imprisoned not more than thirty days. Each day during which the violation continues constitutes a separate violation. Multiple violations of this act may result in the revocation of any applicable license or permit issued by the board.
Section 39-34-160. An application to the milk board for a license to operate as a milk buyer must be made by mail, or otherwise, within five days after the provisions of this chapter become effective, and as to any buyer beginning business after that date, the buyer shall submit an application on forms prescribed by the board before the buyer may begin business.
Section 39-34-170. A license required by this chapter is in addition to any other license required by existing laws of this State or by any municipal ordinance.
Section 39-34-180. Nothing in this chapter may be construed to conflict with or repeal any laws now in force in this State relating to any board of health or sanitary code now in force in this State in any municipality of the State or any municipal ordinances relating to the inspection, grading, production, sale, or distribution of milk.
Section 39-34-190. (A) The milk board shall prepare an annual budget and shall collect the sums of money required for operation of this section from dairy producers in this State. The expenses of the milk board, including salaries and the necessary per diems of the employees of the board, must be met by an assessment of not more than one cent per gallon of milk produced in this State. All assessments collected by the milk board pursuant to this section must be remitted to the State Treasurer to be credited to the State Milk Board Account.
(B) The exact amount of each monthly assessment must be determined by the milk board as necessary to cover its expenses. All assessments must be paid at the time the buyer pays a producer in this State for milk. All officers and employees of the milk board who handle funds of the milk board, or who sign or countersign checks upon these funds, shall severally give bond in an amount and with those sureties as determined by the board. The board shall pay the cost of these bonds, and the board shall determine the amount and sufficiency of the bonds.
Section 39-34-200. If a person violates a provision of this chapter, in addition to any other remedy, the milk board may apply to an administrative law judge for an injunction, if necessary, to protect the public interest without being compelled to allege or prove that any adequate remedy at law does not exist. Section 39-34-210. No provision of this chapter applies to or may be construed to apply to foreign or interstate commerce, except insofar as it is effective pursuant to the United States Constitution and to the laws of the United States. Section 39-34-220. The making of marketing agreements between producers' cooperative marketing associations and buyers and producer-buyers under the provisions of this chapter must not be considered a combination in restraint of trade or an illegal monopoly or an attempt to lessen competition or fix prices arbitrarily, and the marketing contract or agreements between the association and the buyer and producer-buyer, or any agreements authorized in this chapter, must not be considered illegal or in restraint of trade."
SECTION 2. Chapter 34 of Title 39 of the 1976 Code, as added by this act, is repealed on July 1, 2011.
SECTION 3. This act takes effect upon approval by the Governor.
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