Various changes to the Agricultural Producer Security Program, providing an exemption from emergency rule procedures, and granting rule-making authority. (FE)

Small vegetable processor exemption Except for restaurants, other retail food establishments, and certain federally licensed persons, current law requires a person who procures vegetables grown for use in food processing from a vegetable producer, or the producer's agent, to satisfy certain requirements including payment of fees and assessments, holding a license granted by DATCP, and filing annual financial statements. The bill exempts a person who procures vegetables that are grown for use in food processing from a vegetable producer, or the producer's agent, from those requirements if the person spends less than $15,000 per year on procuring vegetables.

Milk deferred payment contracts The bill allows a person who buys milk from a milk producer to enter into a contract to pay the producer for that milk up to approximately five months after the person receives the milk. Under the bill, a deferred payment contract for milk must be in writing, contain certain notices, and meet certain other requirements. Current law requires that a person who buys milk from a milk producer make certain portions of the payment for that milk by the 4th and the 19th days of the next month. The bill also requires DATCP to promulgate rules that establish an additional license assessment that a milk producer must pay for entering into a deferred payment contract, and requires a person who buys milk under a deferred payment contract to file and maintain security with DATCP, in certain situations, until it is eligible to be released.

Grain dealer and grain warehouse keeper fund balances The bill also combines the agricultural producer security fund balance attributable to grain dealers and the fund balance attributable to grain warehouse keepers into a single fund balance attributable to both. Current law establishes a threshold for each fund balance attributable to a particular type of contractor, at which DATCP is required to reduce certain fees paid by contractors who have contributed to the fund by a portion of the amount that the fund balance exceeds the threshold. The bill adds together the threshold for the fund balance attributable to grain dealers and the threshold for the fund balance attributable to grain warehouse keepers to create a single threshold for certain fee reductions for both grain dealers and grain warehouse keepers. Under the bill, however, if the fund balance attributable to both grain dealers and grain warehouse keepers exceeds the threshold established by the bill, grain warehouse keepers are not eligible to receive a reduction in their inspection fee until January 1, 2023.

Grain dealer deferred payment purchases The bill also exempts the purchases that a grain dealer makes under a deferred payment contract from being counted in the requirements that are used to determine whether a grain dealer must file annual statements or file and maintain security with DATCP, if the producer who sells the grain under the deferred payment contract permanently waives its ability to receive a payment from the agricultural producer security fund after a default by that grain dealer. Under current law, such purchases are included in determining whether a grain dealer must file annual financial statements or file and maintain security, in certain situations, with DATCP.

Payments to producers due to a default The bill also requires DATCP to disallow a claim by a producer for compensation from an agricultural producer security fund for a default if the producer does not file a claim against the defaulting party in each federal bankruptcy proceeding or state insolvency proceeding, initiated by another party, in which the producer is eligible to file a claim. The bill also grants DATCP subrogation rights to recover from a defaulting party, or any other party that is liable to a producer, the amount of any payment made by an agricultural producer security fund to a producer as a result of a default.

Other provisions The bill also modifies the amount of security that a grain dealer or milk contractor is required to maintain in certain other situations besides when purchases are made under a deferred payment contract. Also, the bill eliminates the current law requirement that a sworn and notarized statement accompany a license application and certain financial reports that must be filed with DATCP.