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Committee backs bill to create statutory trust for milk producers' payments
Summary
The Senate Agriculture and Natural Resources Committee recommended House Bill 2254 favorably after testimony that the measure would allow cash-selling milk producers to claim payments held by processors if the processor defaults, with safeguards and notice requirements included.
Chairman Mark Peck said the committee opened a hearing on House Bill 2254, which would require milk processors to hold payments in trust for milk producers until full payment is received.
The bill would create a statutory trust over proceeds of milk sales and allow a producer to require a processor to establish an escrow account if timely payment is not made. Under the proposal, a processor would not be required to hold payments in trust or escrow unless a milk producer gives written notice within specified deadlines; the bill also excludes transactions between cooperative associations acting as marketing agents and their members. The measure would make processors who fail to pay liable for the purchase price, interest and reasonable attorney fees. The reviser said the bill "would take effect on July 1" and that it passed the House on a 123-0 vote.
Nut graf: Supporters told the committee the bill is intended to protect…
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