SB-1131, As Passed House, March 18, 2010

SUBSTITUTE FOR

SENATE BILL NO. 1131

     A bill to amend 2001 PA 266, entitled

"Grade A milk law of 2001,"

by amending sections 31, 32, 33, and 53 (MCL 288.501, 288.502,

288.503, and 288.523), sections 31 and 53 as amended by 2008 PA

136.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 31. (1) An applicant for an initial license as a milk

plant shall apply to the department on a form supplied by the

department and provide a statement containing the following:

     (a) The milk plant's correct legal name and any name by which

the milk plant is doing business. If the milk plant is a person not

an individual, the name of each officer and director, and partner,

member, or owner owning in excess of 35% of equity or stock.

     (b) The location of the milk plant to which the statement

pertains and the name of the responsible person who may be

contacted at that location.

     (c) The anticipated value of greatest milk receipts the milk

plant expects to receive during a consecutive 30-day period within

the licensing period.

     (d) A list of producers, including names, mailing addresses,

and department producer permit number, with whom the milk plant

intends to do business except that not later than 90 days after

becoming licensed for the first time, the milk plant shall send an

updated list to the department.

     (e) The name of the financial institution through which milk

checks are to be issued to producers.

     (f) The annual volume of raw milk the milk plant anticipates

receiving.

     (2) A milk plant shall annually renew a license issued under

this act by applying to the department at least 30 days prior to

the expiration of the existing license. The anniversary date of a

license for a milk plant that is providing a financial statement as

a security device is 130 days after the close of the licensee's

fiscal year. The milk plant shall apply for renewal of a license on

a form supplied by the department and provide a statement

containing the following:

     (a) The milk plant's correct legal name and any name by which

the milk plant is doing business. If the milk plant is a person not

an individual, the name of each officer and director, and partner,

member, or owner owning in excess of 35% of equity or stock.

     (b) The location of the milk plant to which the statement

pertains and the name of the responsible person who may be

contacted at that location.

     (c) The greater of either the value of greatest milk receipts

that the milk plant received within a consecutive 30-day period

during its last license year or the greatest milk receipts that the

milk plant is anticipated to receive during a consecutive 30-day

period within the licensing period.

     (d) A complete list of producers, including names, mailing

addresses, and department producers permit number, with whom the

milk plant is doing business.

     (e) The name of the financial institution through which milk

checks are issued to producers.

     (f) The annual volume of raw milk each milk plant anticipates

receiving. The department may conduct an audit to verify the

accuracy of the annual volume of raw milk receipts reported and may

reassess the license fee accordingly. In the alternative, the

department may utilize an audit conducted by the United States

department of agriculture or any other audit acceptable to the

director.

(3) Each milk plant shall pay a $175.00 annual licensing or

permitting fee, and additionally, an annual fee of $5.00 for each

dairy farm whose milk is received at the milk plant, receiving

station, or transfer station, plus an additional $10.00 per farm

shipping to it if the milk plant, receiving station, or transfer

station operator does not maintain an adequate number of industry

personnel, as determined by the director, who are approved to

conduct certified industry farm inspections. The department shall

not levy this additional $10.00 per farm fee if a cooperative

association is conducting the certified industry farm program for

the milk plant operator. The department shall only charge the dairy

farm license fee to the producer if the producer is not assigned to

a milk plant that pays the annual fee required by this subsection

for the producer. Any such unassigned producer shall be charged a

handling fee of $5.00 plus an additional $10.00 if certified

industry farm inspectors are not assigned to the farm. License

renewal for a milk plant shall take place on June 30 of each year

unless otherwise specified in this act. A milk plant licensed under

this act shall pay an annual license or permit fee as follows:

     (a) Milk plant with less than 20,000,000 pounds of anticipated

raw milk receipts per year, at a rate of $400.00 per year.

     (b) Milk plant with greater than or equal to 20,000,000 but

less than 100,000,000 pounds of anticipated raw milk receipts per

year, at a rate of $800.00 per year.

     (c) Milk plant with greater than or equal to 100,000,000

pounds of anticipated raw milk receipts per year, at a rate of

$1,600.00 per year.

     (4) Any fees, assessments, civil or administrative fines, and

money from any other source collected by the department under this

act shall be deposited into the dairy and food safety fund created

in section 4117 of the food law of 2000, MCL 289.4117.

     (5) A milk plant operator shall submit detailed plans to the

department for approval before commencing new construction,

remodeling, and equipment changes. Plans for new construction or

remodeling shall include a plan that provides for operational or

physical isolation of the milk plant from sources of potential

product contamination caused by animal production facilities

located in close proximity to the milk plant. Retail or public

viewing areas shall be separated from processing areas by a solid

floor-to-ceiling partition, except that, as approved by the

director, other equally effective means of protection may be used.

     (6) The department may impose a late fee of $10.00 for a

renewal application for each business day the application is late.

The total late fee shall not exceed $100.00. The department shall

not issue or renew a license until any fees and fines have been

paid. A hearing is not required regarding the department’s refusal

to issue or renew a license under this subsection except as allowed

under the administrative procedures act of 1969, 1969 PA 306, MCL

24.201 to 24.328. The department may charge a convenience fee and

collect from the applicants any additional costs associated with

the method of fee payment for the license or permit fees described

in this section and sections 32 and 33, not to exceed the costs to

the department.

     Sec. 32. (1) Each certified industry farm inspector shall pay

a 3-year license fee of $60.00 $150.00 for a license to conduct

certified farm inspections. An initial license fee may be prorated

in 6-month increments at $10.00 per increment. License renewal

shall take place on the completion date of the 3-year

certification.

     (2) Certified industry farm inspectors must comply with the

requirements for certified inspectors listed in the pasteurized

milk ordinance and, in addition, shall conduct both of the

following:

     (a) A farm inspection of all producers having the first

routine count exceeding legal standards for bacteria or somatic

cells, or both.

     (b) One routine inspection per year of all producers, with a

copy of each required inspection forwarded to the local area dairy

inspector.

     (3) Certified industry farm inspectors may perform official

inspections, only with authorization by the director.

     Sec. 33. (1) Each receiving station or transfer station must

be licensed or permitted either as part of a milk plant or as a

stand-alone facility. Each stand-alone facility will be licensed or

permitted at a rate of $50.00 $250.00 per year. License renewal

shall take place on June 30 every year.

     (2) Each milk tank truck cleaning facility that cleans milk

contact surfaces of milk tank trucks used to haul milk or milk

products regulated under this act must be licensed or permitted

under this act either as part of a milk plant, receiving station,

or transfer station or a stand-alone milk tank truck cleaning

facility. A licensing or permitting fee shall not be charged under

this act for a milk tank truck cleaning facility that is a part of

a dairy plant, receiving station, or transfer station licensed or

permitted under the manufacturing milk law of 2001. Each stand-

alone facility will be licensed or permitted at a rate of $50.00

$250.00 per year. License renewal shall take place on June 30 every

year.

     (3) Each milk transportation company must be licensed or

permitted under this act at a rate of $20.00 $50.00 per year.

License renewal shall take place on June 30 every year.

     (4) Each milk tank truck must be licensed or permitted under

this act at a rate of $10.00 $20.00 per year. License renewal shall

take place on June 30 every year.

     (5) Each distributor who is primarily engaged in the

distribution of finished grade A milk products must be licensed or

permitted under this act either as part of a milk plant or as a

stand-alone distributor. Each stand-alone distribution facility is

licensed at a rate of $50.00 $100.00 per year. License renewal

shall take place on June 30 every year.

     (6) Each single service containers and closures manufacturer

must be licensed or permitted under this act either as part of a

milk plant or as a stand-alone manufacturer. Each stand-alone

facility will be licensed at a rate of $50.00 $250.00 per year.

License renewal shall take place on June 30 every year.

     (7) A person shall not pick up grade A milk in a farm pickup

milk tank from a farm bulk milk tank without a hauler/sampler

license issued by the department under this section. Each applicant

for a license shall be examined by the director under the

provisions of this act to determine his or her qualifications to

evaluate milk in a farm bulk milk tank, to accurately measure milk

in a farm bulk milk tank, to obtain representative samples of milk

from a farm bulk milk tank, to properly handle and deliver the

samples, and to pick up milk. The license fee is $40.00 $50.00 for

2 years. An initial license fee may be prorated in 6-month 1-year

increments at $10.00 $25.00 per increment. A hauler/sampler

licensed or permitted in another state shall apply for a license

from the department without examination after submitting

satisfactory proof of training and current licensing in another

state to the department with the license fee and application,

unless this requirement is waived by the director based on

reciprocal agreements with individual states. The director may deny

license renewal to any bulk milk hauler/sampler if the bulk milk

hauler/sampler has not had a satisfactory evaluation of their

hauler/sampler methods in the previous 2 years. License renewal

shall take place on June 30 every 2 years.

     (8) An applicant for an initial grade A dairy farm permit

shall apply to the department on a form supplied by the department

and pay the annual fee as prescribed by this section.

     (9) Each dairy farm producing grade A milk to be offered for

sale shall be licensed or permitted annually at either of the

following rates:

     (a) If the dairy farm does not maintain adequate industry

personnel, as determined by the director, who are approved to

conduct certified industry farm inspections, $70.00.

     (b) If the dairy farm maintains adequate industry personnel,

as determined by the director, who are approved to conduct

certified industry farm inspections, $25.00.

     (10) The fee described in subsection (9) shall be paid to the

department by June 30 every year.

     (11) A milk buyer shall pay the annual license or permit fee

on behalf of dairy farms and may submit an invoice to the dairy

farms for reimbursement of the fee or may deduct the fee from the

dairy farms' milk check. A milk buyer shall complete a form

provided by the department that indicates the number of producers

for which it is responsible and shall include a list of the

producer names, addresses, and department permit numbers. The

department may conduct audits to verify fee payments.

     (12) The department may assess a plan review fee of $100.00 to

a potential dairy licensee or permittee, to be paid prior to an on-

site consultation. The plan review fee is not refundable and does

not apply toward any future license fees.

     (13) The department may assess a $300.00 fee on any licensee

or permittee requiring the performance of 2 or more consecutive

reinspections for compliance of items found in violation of this

act.

     Sec. 53. (1) The director shall impose upon a producer who

violates this act by selling or offering for sale milk which has

been found positive for violative drug residues on a test performed

pursuant to the pasteurized milk ordinance, the following sanctions

and administrative fines and provide notice and the opportunity for

an administrative hearing:

     (a) The following in the case of a first violative drug

residue within a 12-month period:

     (i) The producer's milk shall not be offered for sale until a

subsequent sample of the producer's milk tests negative for

violative drug residues at an approved laboratory.

     (ii) The producer shall pay an administrative fine equal to the

lost value of the milk on the entire contaminated load and any

costs associated with the disposition of that load. The

administrative fine shall be paid directly to the milk buyer. The

producer shall pay an administrative fine of $300.00 to the

department upon the violative shipment, as determined by an

approved drug residue test. The milk buyer may pay the

administrative fine, if a like amount has been deducted from the

producer's milk check. If the producer's violative shipment caused

the partial or total loss of a load of milk, the producer shall pay

directly to the milk buyer an additional administrative fine equal

to the lost value of the contaminated load and any costs associated

with the disposition of that load. The department shall be provided

with written notification of the payment. Written notification

shall also be provided to the department of the date and location

of the disposal of the entire contaminated load. Where a producer

markets their own load of milk, the producer shall provide written

notification to the department of the date and location of the

disposal of the entire contaminated load. If the producer's

violative shipment did not cause partial or total loss of a load of

milk as determined by an approved drug residue test, the producer

shall pay an administrative fine of $300.00 to the department. The

milk buyer may pay the administrative fine, if a like amount has

been deducted from the producer's milk check.

     (b) The following in the case of a second violative drug

residue within a 12-month period:

     (i) The producer's milk shall not be offered for sale until a

subsequent sample of the producer's milk tests negative for

violative drug residues at an approved laboratory.

     (ii) The producer shall pay an administrative fine equal to the

lost value of the milk on the entire contaminated load and any

costs associated with the disposition of that load. The

administrative fine shall be paid directly to the milk buyer. The

producer shall pay an administrative fine of $600.00 to the

department upon the violative shipment, as determined by an

approved drug residue test. The milk buyer may pay the

administrative fine, if a like amount has been deducted from the

producer's milk check. If the producer's violative shipment caused

the partial or total loss of a load of milk, the producer shall pay

directly to the milk buyer an additional administrative fine equal

to the lost value of the contaminated load and any costs associated

with the disposition of that load. The department shall be provided

with written notification of the payment. Written notification

shall also be provided to the department of the date and location

of the disposal of the entire contaminated load. Where a producer

markets their own load of milk, the producer shall provide written

notification to the department of the date and location of the

disposal of the entire contaminated load. If the producer's

violative shipment did not cause partial or total loss of a load of

milk as determined by an approved drug residue test, the producer

shall pay an administrative fine of $600.00 to the department. The

milk buyer may pay the administrative fine, if a like amount has

been deducted from the producer's milk check.

     (iii) The producer will be required to test all milk prior to

shipment with a drug residue test acceptable to the director for a

minimum of 12 months and must shall retain records of these tests

for a minimum of 18 months.

     (iv) The producer will be required to maintain complete drug

treatment records for all lactating or near lactating dairy animals

for a minimum of 12 months and must shall retain records of these

treatments for a minimum of 18 months.

     (c) The following in the case of a third or any additional

violative drug residue within a 12-month period:

     (i) The producer's milk shall not be offered for sale until a

subsequent sample of the producer's milk tests negative for

violative drug residues at an approved laboratory.

     (ii) The producer shall pay an administrative fine equal to the

lost value of the milk on the entire contaminated load and any

costs associated with the disposition of that load. The

administrative fine shall be paid directly to the milk buyer. The

producer shall pay an administrative fine of $1,200.00 to the

department upon the violative shipment, as determined by an

approved drug residue test. The milk buyer may pay the

administrative fine, if a like amount has been deducted from the

producer's milk check. If the producer's violative shipment caused

the partial or total loss of a load of milk, the producer shall pay

directly to the milk buyer an additional administrative fine equal

to the lost value of the contaminated load and any costs associated

with the disposition of that load. The department shall be provided

with written notification of the payment. Written notification

shall also be provided to the department of the date and location

of the disposal of the entire contaminated load. Where a producer

markets its own load of milk, the producer shall provide written

notification to the department of the date and location of the

disposal of the entire contaminated load. If the producer's

violative shipment did not cause partial or total loss of a load of

milk as determined by an approved drug residue test, the producer

shall pay an administrative fine of $1,200.00 to the department.

The milk buyer may pay the administrative fine, if a like amount

has been deducted from the producer's milk check.

     (iii) The suspension of the producer's permit for a period not

to exceed 60 days after notice and the opportunity for an

administrative hearing before the department.

     (iv) The producer will be required to test all milk prior to

shipment with a drug residue test acceptable to the director for a

minimum of 12 months and must shall retain records of these tests

for a minimum of 18 months.

     (v) The producer will be required to maintain complete drug

treatment records for all lactating or near lactating dairy animals

for a minimum of 12 months and must retain records of these

treatments for a minimum of 18 months.

     (2) The director may accept verification, on forms acceptable

to the director, from the violative producer's milk marketing

cooperative or purchaser of milk as satisfying the penalty

requirements and may verify the information.

     (3) The disposal method and location of disposal for violative

drug residue milk on the milk tank truck shall be immediately

reported to the director, by the party making the disposal, on

forms provided by and acceptable to the director.

     (4) The director shall investigate the cause of the violative

drug residue and shall discuss drug residue avoidance control

measures, as outlined in the pasteurized milk ordinance, with the

violative producer.

     (5) Selling or offering for sale milk which has been found

positive for violative drug residues is determined by either of the

following criteria:

     (a) When milk is picked up from a producer by a milk tank

truck and not commingled with milk from other producers, the milk

becomes subject to possible drug residue penalties at the point the

milk tank truck leaves the farm with the milk.

     (b) When milk is picked up from a producer by a milk tank

truck and commingled with milk from other producers, it becomes

subject to possible drug residue penalties at the point of

commingling.

     (6) Section 52 applies to a producer who violates this act by

selling or offering for sale milk which tests positive for

violative drug residues on a test performed pursuant to the

pasteurized milk ordinance only under either of the following

circumstances:

     (a) The producer fails to pay the administrative fine required

by subsection (1) in compliance with subsections (8) and (9).

     (b) The producer has been fined under subsection (1) within

the preceding 12-month period 3 or more times.

     (7) After notice and an opportunity for an administrative

hearing pursuant to the administrative procedures act of 1969, 1969

PA 306, MCL 24.201 to 24.328, the director may revoke or suspend a

license or permit issued under this act for any violation of this

act or a rule promulgated under this act. Except as otherwise

provided for under subsection (1), upon finding that a person

violated a provision of this act or rule promulgated under this

act, the director may impose an administrative fine of not more

than $1,000.00 and the actual costs of the investigation of the

violation.

     (8) The administrative fines imposed under subsection (1) or

(7) shall be paid to the department within 10 days after

notification of the violation and fine or within 10 days after

notification of adverse findings following a hearing or appeal, or

both. The administrative fines received by the department under

subsections (1) and (7) shall be deposited in the dairy and food

safety fund.

     (9) Failure to pay a load contamination or any other

administrative fine imposed under this section within 120 days

without making acceptable arrangements for payment of the fine may

result in license revocation or permit suspension or court action,

following notice and the opportunity for an administrative hearing.

     (10) The director shall advise the attorney general of the

failure of any person to pay an administrative fine imposed under

this section. The attorney general shall bring an action in a court

of competent jurisdiction to recover the fine.

     (11) A decision of the director under this section is subject

to judicial review as provided by law.

     (12) This section does not require the director to issue an

administrative fine or initiate court action for minor violations

of this act whenever the department believes that the public

interest will be adequately served under the circumstances by a

suitable written notice or warning.