A05533 Summary:

BILL NOA05533
 
SAME ASNo Same As
 
SPONSORLemondes
 
COSPNSR
 
MLTSPNSR
 
Add §§256-c & 256-d, Ag & Mkts L; amd §74, Coop Corps L
 
Establishes a dairy farmers' bill of rights; specifies prohibited unfair trade practices which have the purpose of intentionally impairing a producer's freedom to bargain collectively with other producers in the marketing of the producer's product; provides that the commissioner of the department of agriculture and markets shall take action to restrain such violations upon the application of an association of producers; increases the limit on damages for encouraging or permitting delivery of products in violation of marketing agreements.
Go to top    

A05533 Actions:

BILL NOA05533
 
02/19/2021referred to agriculture
Go to top

A05533 Committee Votes:

Go to top

A05533 Floor Votes:

There are no votes for this bill in this legislative session.
Go to top

A05533 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A5533
 
SPONSOR: Lemondes
  TITLE OF BILL: An act to amend the agriculture and markets law and the cooperative corporations law, in relation to establishing a dairy farmers' bill of rights   PURPOSE OR GENERAL IDEA OF BILL: The purpose of this bill is to provide dairy farmers affiliated with associations of producers with protection from milk dealers who engage in interference with the farmers' right to join or remain in an associ- ation of producers. This would be accomplished by two amendments to existing laws. First, the Agriculture and Markets Law would be amended in relation to the business relationships between milk dealers and farm- ers, to delineate what constitutes an unfair practice by a milk dealer. This bill also provides for the Commissioner of the Department of Agri- culture and Markets to take action to restrain such violations upon the application of an association of producers. Second, this bill strengthens the Cooperative Corporations Law by increasing the penalties to handlers per contract violation from $100 to a maximum of $10,000, while extending the law to also cover the employ- ees of these dealers (handlers) who are more likely to engage in these unfair practices.   SUMMARY OF SPECIFIC PROVISIONS: A new section 256-C is added to the Agriculture and Markets Law entitled "Unfair Practices." This new section is similar to the Federal "Agricul- ture Fair Practices Act": (7 U.S.C. 2303) but expands and further defines prohibited practices by milk dealers in their business relation- ship with dairy farmers. Enforcement of these provisions is by the Department of Agriculture and Markets. Specifically, this measure makes it unlawful for any milk deal- er or employee to engage in the following practices: 1) Coercion; 2) Breach of Contract; 3) Bribery; 4) Refusal to Deal; 5) Falsehood; and 6) Conspiracy. Section 74 of the Cooperative Corporations Law is amended to expand the list of those individuals who may not engage in encouraging or permit- ting violations of marketing agreements, to include "agent or employee" in the existing "officer or manager" listing. Also, this section is further amended by increasing the penalty for each such violation from $100 to $10,000 for each contract.   JUSTIFICATION: New York State Agriculture and Markets Law recognizes the need for and supports the affiliation of farmers in associations of producers, intending to encourage farmers to band together for the common good of all farmers. This was made state policy in the following manner: "It is the policy of this state to promote, foster, and encourage the intelli- gent and orderly marketing of milk through producer owned and controlled cooperative associations..." Section 258-k. "Unfair, unjust, and destructive demoralizing trade practices have been and are likely to be carried on in the production and sale... of milk and that it is a matter of public interest and for the public welfare for the state to promote the orderly exchange of commodities." Section 74 of the Cooperative Corporations Law is currently the only section of the state law which pertains to the business relationships between dairy farmers who are members of associations of producers and milk dealers. This section of law was enacted in 1926, and has not been amended in the 67 years since its enactment. First, the penal sum of $100 does not present the same deterrent value today as it did in 1926. The value of the production of each farmer to a dealer is far in excess of that amount, which means that the intended deterrent effect of that penalty is virtually meaningless to a dealer today. Secondly, in 1926 there were great numbers of dealers in the market- place, and they usually engaged in direct field level negotiations with farmers or had these arrangements handled by a manager. Today, there are fewer but larger dealers in the market, and they have business dealing handled by agents or other employees. As such, this section must be updated to recognize this change. Additionally, this bill expands and strengthens the prohibited practices section of the "Federal Agriculture Fair Practices Act" and places it into state law. The federal law has been ineffective in stopping unfair practices by milk dealers in New York State. The reason for placing this law into state law is two fold: (I) when combined with the aforementioned state policy and a documented complaint of such activity by an association of producers, this statute would give clear guidelines to the New York State Department of Agriculture and Markets for actions to be taken by the Department to restrain such violations; (2) Federal enforcement of this provision has been limited, despite much more specific guidelines afforded the federal government with this statute. Therefore, the addition of this provision to state law will specifically delineate prohibited practices and provide for expedited action by the state against such violations, while expanding and strengthening the currently applicable statute.   PRIOR LEGISLATIVE HISTORY: 2019/2020 referred to agriculture 2015/2016 held for consideration in agriculture 2013/2014 referred to agriculture 2011/2012 held for consideration in agriculture 2009/2010 A7284 - held for consideration in Agriculture 2005/2006 A6411 - Finch 2003/2004 A3937 - Finch 2001 - A4907; referred to Agriculture 2000 - A.9776 1999 - Fessenden 1997-98 - A.3141; held in Agriculture 1995-96 - A.2147; referred to Agriculture 1993-94 - A. 6010/S.3564; referred to Agriculture 1992 - A.3224 (Davidsen); Referred to Agriculture; 5.2086 (Kuhl); Starred; Committed to Rules. 1990 - A.130-B (McCann); Held in Agriculture; S. 1688-A (Kuhl); Passed the Senate. 1989 - A.130-B (McCann); Amended and recommitted to Agriculture; S. 1688-A; Passed Senate. 1988 -- A similar Bill (A. 10802 (Bragman)/S. 9166 (Kuhl) was vetoed by the Governor.   FISCAL IMPLICATIONS: None.   EFFECTIVE DATE: Immediately.
Go to top

A05533 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          5533
 
                               2021-2022 Regular Sessions
 
                   IN ASSEMBLY
 
                                    February 19, 2021
                                       ___________
 
        Introduced by M. of A. LEMONDES -- read once and referred to the Commit-
          tee on Agriculture
 
        AN  ACT  to  amend  the  agriculture and markets law and the cooperative
          corporations law, in relation to establishing a dairy farmers' bill of
          rights
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section  1.  The  agriculture and markets law is amended by adding two
     2  new sections 256-c and 256-d to read as follows:
     3    § 256-c. Dairy farmers' bill of rights; declaration of  policy.    The
     4  expressed  intent  of  the agriculture and markets law and the policy of
     5  this state is to foster and encourage  the  marketing  of  milk  through
     6  producer  owned  and  controlled  cooperatives. The orderly marketing of
     7  milk for the benefit of farmers, milk dealers, and consumers is enhanced
     8  when milk producers are free to make an independent  uncoerced  decision
     9  regarding their participation in cooperative associations, as authorized
    10  by  state  and  federal law.   Interference in the exercise of this free
    11  right of choice is contrary to the public interest. For this reason, the
    12  legislature finds that the public interest  requires  that  there  be  a
    13  specification  of  prohibited  unfair  trade  practices  which  have the
    14  purpose of intentionally  impairing  a  producer's  freedom  to  bargain
    15  collectively  with  other  producers  in the marketing of the producer's
    16  product.
    17    For purposes of this section, (i) an  "association  of  producers"  or
    18  "cooperative"  shall  mean  any  corporation  or  association of persons
    19  engaged in the production of milk and operating for the  mutual  benefit
    20  of its members in conformity with the requirement of the Capper-Volstead
    21  act, and any federation of such corporations or associations, or of such
    22  corporations,  associations, and individual producers, and (ii) an asso-
    23  ciation of producers shall not be considered to be a milk dealer.
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD09418-01-1

        A. 5533                             2
 
     1    § 256-d. Unfair practices by dealers. 1. It shall be unlawful for  any
     2  milk  dealer  or  any of its officers, managers, agents, or employees to
     3  intentionally impair a producer's freedom to join or to  participate  in
     4  an association of producers or cooperative by:
     5    (a)  coercing,  through  threat of injury to person or property, or to
     6  health, safety, business or financial condition, reputation or  personal
     7  relationships  any  producer in the exercise of his or her right to join
     8  and belong to an association of producers or cooperative;
     9    (b) soliciting or requesting any producer to breach a marketing agree-
    10  ment or other contractual agreement between the producer and an  associ-
    11  ation of producers or cooperative;
    12    (c)  making  a loan or gift of money, or of anything else of value, or
    13  offering to make such a loan or gift for the specific purpose of  induc-
    14  ing a producer to refuse or cease to belong to an association of produc-
    15  ers or cooperative;
    16    (d) refusing to deal with any producer, because of the exercise of the
    17  producer's  right  to  join and belong to an association of producers or
    18  cooperative;
    19    (e) making false reports about the finances or management of an  asso-
    20  ciation  of producers or other milk dealers in reckless disregard of the
    21  truth or knowing that such statements are untrue and  that  there  is  a
    22  reasonable  likelihood  that  such  statements  will impair a producer's
    23  right to make an independent decision to belong  to  an  association  of
    24  producers or cooperative; and
    25    (f)  conspiring,  combining,  agreeing,  or  arranging  with any other
    26  person to do, or aid and abet the doing of, any  act  made  unlawful  by
    27  this section.
    28    2.  For purposes of this section: (a) an "association of producers" or
    29  "cooperative" shall mean  any  corporation  or  association  of  persons
    30  engaged  in  the production of milk and operating for the mutual benefit
    31  of its members in conformity with the requirements  of  the  Capper-Vol-
    32  stead  act,  and any federation of such corporations or associations, or
    33  of such corporations, associations, and individual producers, and (b) an
    34  association of producers shall not be considered to be a milk dealer.
    35    3. Nothing in this section is intended to prevent  bargaining  between
    36  milk  dealers and producers or associations of producers with respect to
    37  price or any other terms of purchase or handling of milk in a course  of
    38  dealing  not  proscribed  by this section, nor to prevent producers from
    39  requiring that payment be made through an association  of  producers  or
    40  cooperative.
    41    4. Whenever the commissioner has reason to believe a violation of this
    42  section  has  occurred,  the  commissioner  may  commence  such judicial
    43  action, or institute such investigation or proceeding and issue an order
    44  based thereon, as is provided by this article or article three  of  this
    45  chapter;  provided,  however, that the commissioner shall take no action
    46  against a milk dealer under section two hundred  fifty-eight-c  of  this
    47  article  for  conduct  which  is a violation of this section unless such
    48  dealer is at the time of such conduct subject to a final  administrative
    49  or  judicial  order  which  prohibits  such  conduct by such dealer; and
    50  provided further that nothing contained in this section shall impair  or
    51  delay the private right of action created by section seventy-four of the
    52  cooperative corporations law for any violation of that section.
    53    § 2. Section 74 of the cooperative corporations law is amended to read
    54  as follows:
    55    §  74. Liability for damages for encouraging or permitting delivery of
    56  products in violation of marketing agreements.    Any  person,  firm  or

        A. 5533                             3
 
     1  corporation who solicits or persuades or aids or abets any member of any
     2  cooperative corporation incorporated under or subject to this chapter to
     3  breach  his  marketing  contract  with  the  corporation by accepting or
     4  receiving  such  member's products for sale, marketing, manufacturing or
     5  processing thereof contrary to the terms of any marketing  agreement  of
     6  which said person or any officer [or], manager, agent or employee of the
     7  said  corporation  has knowledge or notice, shall be liable in the penal
     8  sum of [one hundred]  not  more  than  ten  thousand  dollars  for  each
     9  contract,  to  the cooperative corporation aggrieved in a civil suit for
    10  damages; and such  cooperative  corporation  shall  be  entitled  to  an
    11  injunction  against  such person, firm or corporation to prevent further
    12  breaches.
    13    § 3.  This act shall take effect immediately.
Go to top