Article 11. Financing Plan of California Food And Agricultural Code >> Division 22. >> Part 2. >> Chapter 1. >> Article 11.

This article provides for a comprehensive and continuing plan for financing the operations of the council.

Annually, prior to the commencement of the fiscal year, the secretary shall, upon recommendation of the council, establish and announce the fees for milk used in class 1 and for all other usages to be paid by producers, producer-handlers, and handlers for the coming fiscal year. These fees shall be established at levels sufficient to finance the budget for the coming fiscal year as approved by the secretary pursuant to Sections 64153 and 64154. The fee established by the secretary for class 1 milk shall not exceed two cents ($.02) per hundredweight of such market milk testing 3.5 percent milkfat and 8.7 percent solids-not-fat. The fee established by the secretary for all other usages of milk shall not exceed eight mills ($0.008) per hundredweight of milk testing 3.5 percent milkfat and 8.7 percent solids-not-fat. The relationship between the fees per hundredweight established for class 1 milk and for all other usages shall be at a ratio of 2.5 to 1. These fees shall be the same for producers and handlers.

(a) Each producer and producer-handler shall pay fees established for each hundredweight of milk produced by him or her in the state and delivered to a handler. The fees shall be collected by the first handler that purchases, or otherwise acquires possession or control of, this milk by deducting the fee from any payment which is due the producer for this milk. Each producer-handler shall pay the fee on his or her own production. For the purposes of this article, a handler that sells unprocessed milk, of which he or she has the right to possession or control by contract or otherwise, to another handler, and delivers this milk in unprocessed form to this other handler or causes this milk to be delivered to this other handler directly from the producer, is the first handler of this milk.
  (b) For the purpose of this chapter, the class 1 fee of each producer shall be determined on the hundredweight equivalent computed by combining the class 1 fat usage and the class 1 skim usage included in the payment to the producer. This skim usage shall be computed by dividing the solids-not-fat usage by the monthly average solids-not-fat test of skim milk first received from the producer by handlers or producer-handlers.
  (c) The fee of each producer for all other milk shall be determined on the total hundredweight of milk produced and delivered remaining after deducting the class 1 equivalent as computed herein.
  (d) The collection of fees to be paid by handlers, including producer-handlers, pursuant to Section 64303 is to be used for the handler portion of council assessments only, and shall not affect payments of producers, nor in any way change the method of producer payment for milk.

Each handler and producer-handler shall pay to the director the fees established for class 1 milk and for milk for all other usages on all milk, skim milk, and cream utilized in the plant of the handler, or producer-handler in the processing and manufacture of milk and milk products. This usage shall be computed by combining pounds of fat and skim milk so utilized, together with allocated plant loss of this milkfat and skim milk.

The fees established and assessed as prescribed in this chapter shall be billed monthly to the handler and the producer-handler, and shall be paid to the director not later than the 15th day of the second month following the month during which the milk was received.

Fees established and assessed under this chapter may be enforced and collected by the secretary through direct payment or through pool accounting procedures established by the secretary under Chapter 3 (commencing with Section 62700).

To the amount of fees which are unpaid when due, the secretary may add a penalty of 10 percent. In addition, the secretary may assess interest at a rate of 1 percent of the unpaid balance for each 30 days the assessment is unpaid.

The director, by action prosecuted by him or her, may recover any unpaid fees. In any action, a certificate of the director which shows the amount, including penalty, determined by the director to be required to be paid by the person required to pay this amount is prima facie evidence of the delinquency. The presumption established by this section is a presumption affecting the burden of proof.

If any handler or producer-handler does not provide the information necessary to determine the amount of fees 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. In any action by the director to recover fees pursuant to this chapter, a certificate of the director which shows the amount determined by the director to be required to be paid by the person that is required to pay the fees is prima facie evidence of the delinquency of the amount which is shown. The presumption established by this section is a presumption affecting the burden of proof.

(a) Fees paid on milk pursuant to this chapter shall be refunded to producers who meet the following criteria:
  (1) The producer shipped the milk to a processor during the months of June or July 1986.
  (2) The producer was not paid, or received only partial payment, for the milk shipped.
  (3) The producer has agreed to repay the refunded fees to the affected programs if, at a subsequent date, the producer is paid for the milk.
  (b) The producer shall receive a full refund of the fees paid on milk shipped for which no payment was received. If partial payment was received the producer shall receive a refund of the fees paid on milk for which payment was not received.
  (c) In lieu of payment to the producer, the refund shall be paid to an entity which markets milk or otherwise acts on behalf of a producer who would otherwise qualify for the refund under subdivision (a) if that entity demonstrates to the satisfaction of the director that it paid the fees for the producer.
  (d) If a producer, or an entity referred to in subdivision (c), subsequently receives full or partial payment for milk for which fees have been refunded, the producer or entity, as the case may be, shall repay the fees in an amount proportionate to the portion of milk for which payment has been received.
  (e) Refunds shall not be made pursuant to this section if the refund would cause a producer to incur an additional assessment obligation to the National Milk Promotion Program.
  (f) The director shall adopt procedures for refunding fees in accordance with this section. Those procedures shall not be subject to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code.

(a) Any money that is collected by the director pursuant to this chapter shall be deposited in a bank or other depository which is approved by the Director of Finance. Funds which are so collected shall be deposited and disbursed in conformity with appropriate regulations prescribed by the director and may be allocated to pay for expenses generated by the auditing requirement imposed by subdivision (b). The expenditure of those funds shall be exempt from the provisions of Section 925.6 of the Government Code.
  (b) All expenditures by the director shall be audited at least once every two years by one of the following means:
  (1) By contract with a certified public accountant.
  (2) By contract with a public accountant holding a valid permit issued by the California Board of Accountancy.
  (3) By contract with a public accounting firm.
  (4) By agreement with the Department of Finance. A copy of the audit shall be delivered within 30 days after the completion thereof to the Governor, the director, and the Controller.

Any money which is collected by the director pursuant to this chapter is hereby appropriated to the department to carry out the duties which are imposed upon the director and the council pursuant to this chapter. The appropriation which is made in this section is exempt from the operation of Section 16304 of the Government Code. The money which is collected by the director pursuant to this chapter shall be disbursed by the director only for the necessary expenses incurred by the council and the director to carry out the purposes of this chapter, including the payment of refunds which are authorized pursuant to this chapter. The director may disburse these funds in authorized activities related to particular dairy products without reference to the branches of the dairy industry from which these funds are derived.

Any money which is deposited pursuant to Section 64309, which the director determines is available for investment, may be invested or reinvested by the Treasurer or the council 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 Part 2 of Division 4 of Title 2 of the Government Code, and handled in the same manner as money in the State Treasury. For these purposes, these moneys may also be combined with funds determined by the director to be available for investment pursuant to Section 58939.

Any increment which is received from investment, reinvestment, or deposit of money pursuant to Section 64311 shall be deposited to the credit of the council. The State Treasurer may deduct from this remittance an amount equal to the reasonable costs incurred in carrying out the provisions of this article or may bill the director for the costs and the director shall pay the costs from moneys collected pursuant to this chapter.

This article shall become operative on January 1, 1983.