MILK AND MILK PRODUCTS

· clarified and expanded drug residue testing requirements; and

· a new requirement that plant codes and manufacturer lot numbers be placed on package containers.

Both bills would take effect 30 days after enactment, and neither bill would take effect unless the other did as well.

House Bills 4820 and 4829 contain several provisions that are virtually identical, except that House Bill 4820 deals specifically with Grade A milk and Grade A milk products and House Bill 4829 deals specifically with manufacturing milk and manufactured dairy products. This section summarizes the provisions common to both bills; "milk and milk products" refers to Grade A milk, Grade A milk products, manufacturing milk and manufactured dairy products. "The laws" or "the acts" refers specifically to the Fluid Milk Act of 1965 and the Manufacturing Milk Law, which currently constitute the basis of the regulation of milk and milk products.

Provisions common to House Bills 4820 and 4829.

Water for milkhouse and milkroom operations. The bills would clarify that the Department of Environmental Quality was instructed to make recommendations about water for milkhouse and milkroom operations.

Local authority and reciprocity. The Fluid Milk Act of 1965 prohibits a political subdivision of the state from imposing different standards or requirements than those set forth in the act and allows the director to extend reciprocity to governmental units outside the state that accept Michigan Grade A milk and Grade A milk products. Both bills would retain these provisions but would expand them to apply to all milk and milk products.

Right of entry, inspection, and seizure. The act setting forth the powers and duties of the dairy and food commissioner authorizes the director to enter, inspect, sample, investigate, and seize facilities or products for the purpose of ensuring that quality standards for the production, processing, and handling of milk and dairy products are being met. The bills would authorize the director to enter all dairy farms, milk plants, single service manufacturing facilities, milk tank truck cleaning facilities, receiving stations, transfer stations, distribution facilities, vehicles used to transport milk and milk products, or single service manufacturers under its jurisdiction, for the purpose of inspecting, sampling, and investigating conditions relating to the enforcement of the act. The bills would also authorize the director to seize or hold for investigation any milk, milk product, or equipment that the director had reason to believe was adulterated, constituted or could be contributing to an imminent health hazard, or violated the act. Such milk, milk products, or equipment could not be disposed of until a release was secured from the director. The director would have to complete his or her action on any such seized item within a reasonable time, and the farm, plant, or station would have to be promptly notified of the director's decision. The director could collect and retain evidence to verify the determination of an imminent health hazard. Whenever the director found in any farm, station, or vehicle any milk, milk product, or other product that contained any unwholesome substance or that could be poisonous or deleterious to health or otherwise unsafe, the director would declare the defective milk or product to be an imminent health hazard. The director would also have to condemn, destroy, or in any other manner render the defective milk or product unsalable as human food. Finally, the bill would prohibit both the removal of a condemnation or seizure tag attached to any container of condemned milk or cream and the transfer of condemned milk to another container for sale (or offer for sale) for human consumption.

Inspection reports. The bills would also specify that the director of the department-rather than the department-was responsible for furnishing copies of inspection reports on any dairy farm producing milk to a purchaser of milk from the farm upon written request.

Temporary licenses or permits. The bills would still allow the director to issue a temporary license or permit if he or she determined that doing so would not be detrimental to the protection of the public health, safety, or welfare or would not cause an imminent threat of financial loss to producers.

Correctional facilities. The bills would add provisions stating that a restricted license would be required by, and could be issued to, correctional facilities that produced or processed milk for use only in the correctional system.

Special license fees or taxes. The Fluid Milk Law of 1965 forbids the state or a political subdivision of the state from levying special license fees or taxes on one or more of the persons or businesses involved in the production, transportation, processing, labeling, or selling of milk or milk products. This prohibition does not apply to taxes or fees that are generally levied on persons or businesses other than dairy plants and dairy plant operators. The bills would forbid a political subdivision of the state-but not the state-from levying such special license fees or taxes.

Payment dates. Both laws require a person purchasing milk for resale or manufacture into another product to pay the milk's producer an advance payment on or before the last day of each month, for milk received during the first 15 days of the month, and a final payment on or before the fifteenth day after the end of the month for milk received during the previous month. The bills would require the purchaser to pay the producer an advance payment on or before the twenty-sixth of each month, for milk received during the first 15 days of the month, and a final payment on or before the seventeenth day after the end of the month for milk received during the previous month.

Producer security. The laws require the department to revoke or deny a license for a milk plant if the licensee or applicant does not provide a (financial) security device, as a condition of issuance of the license. This requirement applies to any Grade A milk plant that is the first receiving point for milk and any dairy plant that produces manufactured dairy products. The bills would retain the laws' security requirements, including a detailed list of acceptable security devices and conditions under which they are acceptable, clarifying that a plant would have to provide a security device as a condition of issuance and maintenance of a license. The bills would also make the following substantial modifications. First, the bills would retain a provision in both laws that allows a plant that does not provide one of the forms of security specified to provide "other security" acceptable to the department. The term "other security" is currently defined as commercial paper that would qualify as collateral at prime, including negotiable securities, stocks, bonds, or other marketable securities at current market values. However, the bills would redefine "other security" as a mutually acceptable producer security agreement that was acceptable to the director and approved and signed by the milk buyer and all milk sellers selling milk to that milk buyer. Second, under certain conditions, which are identical in the laws and the bills, a certificate of deposit or money market certificate from a financial institution authorized to do business in the state may be used as a security device. Current laws require the deposits of the financial institution to be insured by the Federal Deposit Insurance Corporation. The bills would specify that the financial institution's deposits could be otherwise federally insured. Third, currently the department may require a milk plant to provide a change or increase in a security device if it has reason to believe that the milk plant no longer meets the minimum requirement of the act or that the milk plant can no longer make timely payments. The Manufacturing Milk Act also allows the department to require a milk plant to provide a change or increase in a security device if the value of the milk plant's security device falls below the requirements for one of the following reasons: depreciation in the value of the security, an increase in the maximum liability to producers, or the cancellation or change of the security device as specified in the act. Both bills would allow for the department to require a change or increase in security device for these reasons. Fourth, both laws establish certain procedures for dealing with breaches of obligations secured by one of the specified producer security devices. After deciding whether to allow the claim, the department must notify the principal and surety of its decision by registered mail. In case the department allows the claim, the department may demand, collect, and receive from the licensee or from the licensee's surety or sureties the amount determined to be necessary to satisfy the claims plus interest. The bill would specify that the decision to allow or disallow the claim had to be sent by certified mail and that the department was required to demand and could collect and receive such payment. Fifth, the laws require the department to notify producers delivering milk to a licensed milk plant of the type of security device used for the benefit of producers. The notice must contain certain information. The bills would retain this requirement, but the form would have to contain one piece of information that is not currently required-the amount of security that the security device provided.

Summary suspension. The laws currently direct the department to summarily suspend the license of a licensee, if the department determines that such a suspension is necessary to protect the health, safety, or welfare of the public. The bills would list fifteen specific offenses that would undermine public health, safety, or welfare and that would justify the director's decision to summarily suspend a license or permit. Offenses include offering for sale or selling milk or milk products that were: from diseased animals, or were otherwise considered abnormal, and that had been incorporated with milk or milk products from normal healthy animals; suspected of contamination with any substance considered by the department to be an imminent or substantial health hazard; from production, transportation, packaging, or storage facilities that had such an accumulation of trash, rubbish, dirt, insects, vermin, human or animal wastes, or spoiled milk or milk products that precluded the reasonable protection of the milk or milk products; produced in equipment with a significant portion of the milk contact surfaces covered with an accumulation of residues that were left after having gone through a cleaning regiment and that were thick enough that they could be easily scraped to form a body of solids; stored in a container of unapproved construction; produced from cattle with a majority of the milking herd with an excessive accumulation of manure on the flanks, bellies, or udders that precluded the reasonable protection of the milk from contamination during the milk process; produced with excessive sediment. Other offenses would be: receiving or picking up milk or milk products stored in a container of unapproved construction; offering for sale or selling milk that was of inadequate volume to properly agitate after the first milking; interfering with inspection of milk or milk products; maintaining dead animals on the premises; maintaining a minimum of three of the last five official bacteria or somatic cell counts or official milk or milk product cooling temperatures illegal; and failing to provide milk or milk products free of violative drug residues based on tests approved by the FDA. The bills would further specify that the licensee or permittee would be allowed at least 72 hours to regain compliance and reinstatement of a summarily suspended license or permit prior to scheduling an administrative hearing. Finally, the bills would retain a provision allowing for summary suspension of a license or permit if the department determined that doing so was necessary to prevent an imminent threat of financial loss to one or more producers with whom the licensee or permittee did business.

Fine/penalty. Both laws state that a person who is found guilty of either violating the acts or rules promulgated in accordance with the acts, or providing false or fraudulent information on an application or in response to a request from the department is guilty of a misdemeanor. The misdemeanor is punishable by a fine of $50-$500 or imprisonment for not more than 90 days. This fine or penalty only applies to a producer who violates the act by selling or offering for sale milk that has a positive reaction to a drug residue test in certain circumstances. The bills would increase the range of permissible fines to $250-$2,500 and would specify that a person who violated the federal Pasteurized Milk Ordinance (PMO) would be guilty of a misdemeanor and could be punished with the fine or imprisonment as well.

"Sanitary standards". Several new requirements would impose new sanitary standards. As defined in the bills, "sanitary standards" would mean dairy equipment construction standards and accepted dairy system operating practices formulated by one of the following: 3-A Sanitary Standards Committees representing the International Association for Food Protection, the United States Public Health Service, the USDA, and the Dairy Industry Committee; standards for dairy equipment formulated by the USDA or the FDA; or, equipment or a practice approved by the director on a case-by-case basis.

Examination of books, records, and accounts. Currently, the department is authorized to examine the books, records, and accounts of a milk plant if the plant has not responded to requests from the department concerning the producer security requirements. The bills would require the director to examine the books, records, and accounts of a milk plant if the plant did not respond to the director's requests concerning the annual license or producer security requirements. The bills would further specify that all examinations had to be made within the state.

House Bill 4820. The following provisions would apply specifically to House Bill 4820. The bill would repeal the Fluid Milk Act of 1965-currently the core law regulating Grade A milk and Grade A milk products-and rescind rules 285.408.1 to 285.408.5 of the Administrative Code, governing fluid milk and milk products, effective 30 days after the bill's enactment. The summary below emphasizes differences between the Fluid Milk Act of 1965 and the bill, and "the law" and "the act" refer specifically to the Fluid Milk Act of 1965 unless explicitly stated otherwise. Also, "milk and milk products" refers specifically to Grade A milk and Grade A milk products unless specifically stated otherwise.

General authority. Currently the act directs the department to administer the act and promulgate rules governing the production, transportation, processing, labeling, and sale of Grade A milk and Grade A milk products. The law adopts and declares to be the law of the state certain federal ordinances; where the words "regulatory agency" are used in the ordinances they are amended to read the "Michigan Department of Agriculture." The bill would authorize the department to administer the act, to promulgate rules for its implementation and enforcement, and to adopt revisions of references cited in the act. "Regulatory agency" would still refer to the department.

Pasteurized Milk Ordinance. Except as otherwise specifically defined or described, the federal Pasteurized Milk Ordinance would be adopted and incorporated by reference. Specifically, this means the 1999 edition of the Grade A Pasteurized Milk Ordinance, Recommendations of the United States Public Health Service/Food and Drug Administration, with administrative procedures and appendices, set forth in the USPHS/FDA publication no. 229, and the provisions of the 1995 Grade A Condensed and Dry Milk Products and Condensed and Dry Whey-Supplement I to the Grade A Pasteurized Milk Ordinance, with administrative procedures and appendices. (Note: The federal Pasteurized Milk Ordinance is in the process of being revised, and references in the bill are expected to be updated to refer to the 2001 version when it is enacted.)

Bovine tuberculosis. The bill would specify procedures for milking any dairy animals that were officially classified as tuberculosis reactors, as defined in Title 9 of the Code of Federal Regulations and in "Bovine Tuberculosis Eradication: Uniform Methods and Rules," effective January 22, 1999, and all amendments to those publications that were adopted. Any such dairy animals would have to be milked last or in separate equipment, and the milk from such animals could not be used or sold for human consumption.

License/permit requirement. The bill would retain the act's prohibition against producing, transporting, processing, labeling, and selling milk and milk products unless licensed or permitted. The bill would also require persons who washed milk tank trucks or manufactured single service containers and closures to be licensed or permitted. All applicants for a permit or license would have to complete an application provided by the department and would have to meet the minimum requirements of the act, the PMO, and rules promulgated under the act. The application would require the same information that must be provided on an application for a license under current law.

Drug residue avoidance education. The bill would add a requirement that an applicant for an initial Grade A dairy farm permit had to complete education, acceptable to the director, on drug residue avoidance control measures, as identified in the Pasteurized Milk Ordinance, before receiving the permit.

Milk plant licensing/permitting fee. Under current law each milk plant that is a first receiving point for milk must pay a $50 licensing fee. Each milk plant, receiving station, and transfer station must pay an annual fee of $5 for each dairy farm whose milk is first received at the plant or station. Each milk plant or transfer station must pay an annual license fee of $25 for each location that is not a first receiving point for dairy farm milk. Moreover, each plant or station must pay an additional $10 per farm shipping to it if the operator of the plant or station does not maintain an adequate number of industry personnel who are certified to conduct farm supervision and who do not, in fact, conduct farm supervision. The license fee is not charged to the producer. The bill would require each milk plant to pay a $175 annual licensing or permitting fee, and additionally, an annual fee of $5 for each dairy farm whose milk was received-whether or not it was first received-at the plant, receiving station, or transfer station. The plant would have to pay an additional $10 per farm shipping to it if the milk plant, receiving station, or transfer station operator did not maintain an adequate number of industry personnel, as determined by the director, who were approved to conduct certified industry farm inspections. The additional $10 fee would be waived if a cooperative association conducted the certified industry farm program for the milk plant operator. The department would only charge the dairy farm license fee to the producer if the producer was not assigned to a milk plant that paid the annual fee for the producer. Any unassigned producer would be charged a handling fee of $5 plus an additional $10 if certified industry farm inspectors were not assigned to the farm.

Certified industry farm inspectors. Currently each certified industry fieldman must pay an annual license fee of $10 for a license to conduct certified farm inspections. The license expires on June 30 following the date of issuance. The bill would require each certified industry farm inspector to pay a three-year fee of $60 for a license to conduct inspections. The initial fee could be prorated in six-month increments at $10 per increment. License renewal would have to take place on the completion date of the three-year period. Inspectors would have to comply with requirements for certified inspectors listed in the PMO. Further, they would have to conduct a farm inspection of all producers having the first routine count exceeding legal standards for bacteria or somatic cells or both and one routine inspection per year of all producers. The inspector would have to forward to the local area dairy inspector a copy of each required routine annual inspection. Certified industry farm inspectors could perform official inspections only with the authorization of the director.

Receiving stations and transfer stations. Each receiving station or transfer station would have to be licensed or permitted either as part of a milk plant or as a stand-alone facility. Each stand-alone facility would be licensed or permitted at a rate of $50 per year, and renewal would take place on June 30 of each year.

Milk tank truck cleaning facilities. Each milk tank truck cleaning facility that cleaned milk contact surfaces of milk tank trucks used to haul milk or milk products regulated under the act would have to be licensed or permitted under the act either as part of a milk plant, receiving station, or transfer station or as a stand-alone facility. If it was licensed or permitted as part of a plant or station-or if it was licensed under the Manufacturing Milk Law of 2001-the cleaning facility would not be charged a fee. A stand-alone facility would be licensed or permitted at a rate of $50 per year, with renewal occurring on June 30.

Milk transportation companies, milk tank trucks, and distributors. Currently the law requires each milk distributor or Grade A milk plant operator to pay an annual fee of $10 for each delivery vehicle operated. The bill would require each milk transportation company to be licensed or permitted under the act at a rate of $20 per year and each milk tank truck to be licensed or permitted at a rate of $10 per year. Further, each distributor who was primarily engaged in the distribution of finished Grade A milk products would have to be licensed or permitted under the act either as part of a milk plant or as a stand-alone facility. Stand-alone distribution facilities would have to pay an annual $50 fee. Renewal for any of these licenses or permits would take place on June 30.

Single service containers and closures manufacturers. Each single service containers and closures manufacturer would have to be licensed or permitted under the act either as part of a milk plant or as a stand-alone manufacturer. Each stand-alone manufacturer would have to pay an annual $50 fee. Renewal would take place on June 30 of each year.

Bulk milk hauler/sampler. The law currently requires a person who picks up Grade A milk in a farm pickup milk tank from a farm bulk milk tank to be licensed by the department under either the act or the Manufacturing Milk Act. The license fee is $20 per year. Each applicant for a license is examined by the department under the provisions of the act and rules promulgated by the department to determine his or her qualifications to do each of the following: evaluate milk in a farm bulk milk tank; accurately measure milk in such a tank; obtain representative samples from a tank; properly handle and deliver the samples; and pick up milk. The bill would require a person who picked up Grade A milk in a farm pickup milk tank from a farm bulk milk tank to obtain a hauler/sampler license from the department. The director would examine each applicant for a hauler/sampler license to determine his or her qualifications for the activities listed above. The license fee would be $40 for two years. An initial license fee could be prorated in six-month increments at $10 per increment. The director could deny license renewal to any bulk milk hauler/sampler if the hauler/sampler had not had a satisfactory evaluation of his or her methods in the previous two years. License renewal would take place on June 30 every two years.

Reciprocity for hauler/sampler license. A hauler/sampler licensed or permitted in another state could apply for a license from the department without examination after submitting satisfactory proof of training and current licensing in another state, unless this requirement was waived by the director based on a reciprocal agreement with individual states.

Revocation/suspension of license/permit. Currently the law allows the director to revoke or suspend a license or permit and establishes procedures for doing so. The law states that violations of the act or rules promulgated under the act are sufficient grounds for suspension or revocation of a license. The law also lists other specific grounds for the revocation or suspension of a license. The bill would allow the director to revoke or suspend a license or permit. Instead of establishing procedures that had to be followed, the bill would refer to the procedures set forth in the Administrative Procedures Act of 1969. However, the bill would continue to specify that the department must notify in writing each producer with whom a milk plant does business not less than five days before the date of a contested case. The bill would state that failure to comply with the requirements of the act, the PMO, or any rule promulgated under the act would be sufficient grounds for suspension or revocation. Moreover, in addition to the offenses currently listed in the law, the bill would specify that failure to agitate any milk-as opposed to Grade A milk only-in the farm bulk milk tank before taking a sample for delivery to the milk plant or the department was sufficient grounds for suspending or revoking a license or permit. The bill would also specify that failure to pay a final civil or administrative fine issued under the act would justify suspension or revocation of a license or permit. Finally, the bill would retain a provision authorizing the department to apply to the circuit court to obtain a permanent or temporary injunction to restrain a person from violating the act or a rule promulgated pursuant to the act.

Drug residue test failure/fine. Currently the director is required to follow certain procedures penalizing a producer who violates the law by selling or offering for sale milk which has a positive reaction to a drug residue test. For the first positive test within a 12-month period, the producer must pay a $300 fine to the department. If the producer voluntarily participated in the milk and dairy beef quality assurance program within the 36 months immediately preceding the date of the violative sample, $200 is to be suspended. The administrative fine may be paid by the milk buyer if a like amount has been deducted from the milk check. Additionally, the producer must submit written notification from the buyer of the milk in the form of a pay deduction, that the milk picked up from the farm testing positive was not paid for. In the case of a second positive test within a 12-month period, the producer must submit to the department similar written notification from the buyer and must pay a fine of $600. No part of the fine may be suspended, but the sum may be paid by the milk buyer if a like amount has been deducted from the producer's milk check. In the case of a third positive test within a 12-month period, the producer must submit to the department similar written notification from the buyer and must pay a $1,200 fine. Again, no part of the fine may be suspended, but the sum may be paid by the milk buyer if a like amount has been deducted from the producer's milk check. The standard penalty scheme-$50-$500 or up to 90 days in jail-only applies to a producer who sells or offers for sale milk that has tested positive for drug residues, if the producer fails to pay the $300, $600, or $1,200 drug residue fines within ten days of being notified of the violation or if the producer has been fined three times within the preceding 12-month period.

The bill contains extensive provisions for penalizing producers who sell or offer for sale milk that has been found positive for violative drug residues on a drug residue test performed pursuant to the Pasteurized Milk Ordinance. The following sanctions and administrative fines would apply for any violation: the producer's milk could not be offered for sale until a subsequent sample of the producer's milk tested negative for violative drug residues at an approved laboratory. The producer would have to pay the milk buyer the equivalent of the lost value of the milk on the entire contaminated load and any costs associated with the disposition of that load. Written notification of the date and location of the contaminated load's disposal would have to be provided to the department; producers who market their own milk would be responsible for providing the notification. If the violative shipment did not cause partial or total loss of a load of milk, the producer would have to pay an administrative fine to the department. (The buyer could pay the fine if that amount was deducted from the producer's milk check.)

For the first violative drug residue within a 12-month period, the administrative fine would be $300. The fine for the second violative drug residue within a 12-month period would still be $600. Further, the producer would be required to test all milk prior to shipment with a drug residue test acceptable to the director for at least 12 months and would be required to retain records of the tests for at least 18 months. The producer would also be required to maintain complete drug treatment records for all lactating or near-lactating dairy animals for a minimum of 12 months and would have to retain the records for at least 18 months. The fine for the third violative drug residue within a 12-month period would still be $1,200. The producer's permit would be suspended for not more than 60 days after notice and the opportunity for an administrative hearing before the department. The producer would have to test all milk prior to shipment, maintain drug treatment records for all lactating or near-lactating dairy animals, and retain the records for each, for the periods of time required for the second offense. The director could accept verification from the violative producer's milk marketing cooperative or purchaser of milk as satisfying the penalty requirements and could verify the information. The disposal method and location of disposal for the violative milk on the milk tank truck would have to be reported to the director immediately, by the party making the disposal. The director would be instructed to investigate the cause of the violative drug residue and to discuss avoidance control measures, as outlined in the PMO, with the producer.

After notice and the opportunity for an administrative hearing, the director could revoke or suspend a license or permit issued under the act for any violation of the act or a rule promulgated under the act. For violations of the act or a rule, other than the first, second, or third violations of a violative drug residue test within a 12-month period, the director could impose a fine of up to $1,000 and the actual costs of investigation of the violation. All fines would have to be paid within ten days after notification of the violation or within ten days after notification of adverse findings following a hearing or appeal, or both. All funds would have to be deposited in the general fund, and the initial administrative fines for the first, second, and third violations of a violative drug residue test would have to be appropriated for the purpose of the training or education of producers in management procedures to avoid drug residue contamination. Failure to pay a load contamination or any other administrative fine imposed for testing positive for violative drug residues, without making acceptable arrangements for payment of the fine, could result in license revocation or permit suspension or court action, following notice and the opportunity for an administrative hearing. The director would advise the attorney general of the failure of any person to pay an administrative fine, and the attorney general would bring court action to recover the fine. The director's decisions regarding violations and penalties for selling or offering for sale milk that failed violative drug residue tests would be subject to judicial review. If the department believed that the public interest would be adequately served by a suitable written notice or warning, the director would not be required to issue fines or initiate court action in the case of minor violations.

The $250-$2,500 fine (see above) would apply to a producer who violated the act by selling or offering for sale milk that tested positive for violative drug residues on a test performed pursuant to the PMO only if the producer did either of the following: failed to pay the initial administrative fines for first, second, and third violations within a 12-month period or was fined three or more times within the preceding 12-month period.

Labeling. The bill would specify that packaged milk products were to be labeled as specified in the PMO and the Food Law of 2000.

Bulk milk hauler/sampler. The bill would incorporate and revise administrative rules governing the responsibilities of bulk milk haulers. The bill would prohibit a bulk milk hauler/sampler from taking milk from a farm tank without first determining that the farmer had a valid permit if a permit was required. Milk could be picked up only from an approved farm tank, constructed to "sanitary standards" with agitation and cooling, except as approved in writing by the director on a case-by-case basis. A hauler/sampler could only pick up milk that appeared to be normal and did not contain off odors or visible foreign material and that had been stored on the farm for no more than 72 hours. Goat milk could be stored up to seven days in a tank if cooled, and sheep milk could be frozen for storage. A hauler/sampler could not record or report inaccurately a milk measurement taken in the farm tank. A measurement would have to be made with a measuring gauge that was clean and wiped dry with a sanitary towel or by any other measuring method meeting certain requirements. After measuring the milk in the farm tank, the hauler/sampler would have to record the following information on the pickup record: the gauge or stick reading; the converted reading in pounds; the date and time of the pickup; the milk producer's name and permit number; the temperature of the milk; the hauler/sampler's identification, including name or initials and identification number; the assigned bulk tank unit number. A hauler/sampler would have to provide the original copy of the record to the milk buyer and a duplicate copy, or other record acceptable to the director, to the producer. The milk tank truck driver engaged in direct farm pickup would have direct responsibility for accompanying official samples.

Sampling methods. Administrative rules promulgated by the department currently govern sampling methods. The bill would require the hauler/sampler to take a sanitarily collected representative sample from each farm tank after the tank was agitated for not less than 5 minutes and for not less than 10 minutes for tanks over 1,500 gallons, or for additional time-if recommended by the manufacturer or director-to ensure a representative sample. A sample dipper would have to be rinsed at least twice in the milk prior to transferring the sample to the approved sample container. The hauler/sampler would have to use sample transfer instruments that were of sanitary construction, clean, and sterile, or transfer instruments that were sanitized with approved sanitizers and protected from contamination prior to each use. He or she would have to take a temperature control sample of the milk at his or her first sampling point and would have to place it in the refrigerated, insulated transport case with the first official sample. The hauler/sampler would identify the temperature control sample with the hauler/sampler identification, time, temperature, date, producer permit number, and the letters "T.C." He or she could not sample milk in the farm tank during emptying or in the farm tank with a sample container or any other unapproved transfer instrument or sampling device. He or she would have to place producer milk samples into approved sample containers only, properly protecting them and handling them to prevent contamination. He or she could place milk only in sample containers that were legibly marked with the milk producer's permit number, the date of pickup, the route number, and the temperature. The hauler/sampler would have to store the milk samples inside a refrigerated, insulated transport case that was kept tightly covered until the samples were delivered to the transfer point, laboratory, or other destination. Milk samples would have to be maintained in a temperature range of 32-40 degrees Fahrenheit.

Miscellaneous hauler/sampler requirements. Administrative rules promulgated by the department currently place certain requirements on bulk milk hauler/samplers. The bill would require that a bulk hauler/sampler comply with the requirements of Appendix B of the PMO, which would be incorporated by reference. The hauler/sampler could not adulterate milk in the farm tank or the milk tank truck. He or she would have to completely empty the farm tank each time the unloading hose was hooked up unless he or she discovered that the milk did not meet legal requirements or that the milk tank truck would overflow or be overloaded during periods of seasonal weight restrictions or unless the farm tank was provided with an approved, properly operated, temperature recording device. A bulk milk hauler/sampler would have to carry an accurate, approved dial-type or electronic thermometer with him or her on the route and could not pick up milk from a farm tank that exceeded the maximum temperature allowed by law. He or she would have to keep his or her sample transfer instrument and sample transport case clean and in good repair. Finally, the hauler/sampler would have to use the hose port provided for him or her in the milkhouse for accommodation of the pickup milk hose.

Cleaning requirements. The milk tank transportation company would be responsible for maintaining the tank and milk contact surfaces of a milk tank truck clean and in good repair. Milk or milk products could not be placed in such tanks unless the tanks had been properly cleaned and sanitized at the milk plant, receiving station, transfer station, or other licensed milk tank truck cleaning facility. Suitable facilities for cleaning and milk contact surfaces of the milk tank trucks would have to be provided. The washing and sanitizing of the tanks would have to be carried out by the receiving milk plant, transfer station, or other licensed cleaning facility. The milk transportation company representative or the hauler/sampler would be responsible for cleaning the hose, pump, and valves. After the cleaning and sanitizing operation was completed, a representative of the cleaning facility would have to provide a suitable record identifying who washed the truck, the license or permit identification number of the truck, the date, and the location of the facility. The representative or the hauler/sampler, after inspection of the tank, would have to indicate on the record that the tank had been cleaned to that person's satisfaction. A copy of the record would be kept with the vehicle until it was washed and sanitized again. A hauler/sampler operating with a bulk milk pickup tanker could take more than one trip daily without cleaning and sanitizing the tanker, but it would have to be cleaned and sanitized after the final trip of each day of use. A milk transport tank would have to be cleaned and sanitized each time the tank was emptied. Milk could be picked up in the milk tank truck on the return trip to the hauler/sampler's home if the truck was cool enough to maintain the milk at or below the legal storage temperature; the pickup hose and pump would have to be washed and sanitized at a licensed wash facility or a cleaning facility approved in writing by the director. A milk tank truck could be used to haul potable water, or other wholesome liquid food products, if the milk contact surfaces were properly cleaned and sanitized prior to picking up raw milk. Certain pasteurized products, as specified in the PMO, would have to be transported in milk tank trucks dedicated to hauling pasteurized products. A milk transfer station or receiving station would have to keep daily records-to be kept at the station for at least 30 days-identifying which farm loads of milk had been commingled in each transport tank. Producer samples would have to accompany the transport tank holding the largest amount of the farm bulk milk pickup tanker's milk unless the samples were transferred or held for testing at other locations.

Farm tanks. Administrative rules promulgated by the department currently make certain requirements of farm tanks. The bill would require a farm tank on a dairy farm to be installed so as to remain level at all times. A farm tank would have to have an accurate indicating thermometer stored in the milkhouse that could be either an integral thermometer in the farm tank or a director-approved thermometer. A farm tank would have to have a calibrated means of measurement and an accurate and legible volume to weight conversion chart unless the tank was mounted on an accurate scale. The conversion chart would have to bear the same serial number as that found on the farm tank and measuring rod. The producer would be responsible for recalibrating a farm tank that did not have an accurate conversion chart. All measuring devices, recalibrations, and adjustments, alterations, or other changes to a conversion chart would have to comply with the Weights and Measures Act of 1964 (MCL 290.601 et al.). A farm tank could not be filled to capacity that exceeded the calibrated limits as indicated by the conversion chart. If the producer wished to fill the tank nearer to the top, the tank would have to be calibrated to an additional height that still permitted proper agitation without spillage. Milk to be offered for sale would have to be cooled and stored in the farm tank equipped with cooling and agitation. Other cooling and storage vessels could be used when approved by the director on a case-by-case basis. Milk production would have to be of sufficient quantity that it could be properly agitated not later than at the completion of the first milking into the farm tank. The producer would be responsible for providing facilities for effectively sanitizing farm tanks. Nonelectric farms would have to provide battery-powered lighting for farm tanks that would adequately illuminate each tank opening. Fuels used for milkhouse operations could not cause odors that impart off-flavors.

Standard methods. The care and handling of milk samples by all persons in the chain of possession would have to comply with "standard methods." "Standard methods" would refer to the seventeenth edition of the American Public Health Association's "Standard Methods for the Examination of Dairy Products," dated 1992.

Milk tank truck driver. The bill would retain the current requirement that a licensed bulk milk hauler/sampler collect samples of milk from each load of milk he or she receives for transport. The bill would further clarify that a milk tank truck driver engaged in direct farm pickup had direct responsibility for accompanying official samples.

Methods of analysis. Methods of analysis, including butterfat analysis, would have to comply with the requirements of sections 6 and 7 of the PMO. Analysis required on producer, raw, and finished products samples would have to comply with the PMO.

Sampling/testing responsibilities. The buyer of raw milk would be responsible for making the quality tests on raw milk, at the producer level, that are required by law unless the director specified otherwise. It would be the responsibility of the hauler/sampler to collect the samples for analysis. In situations where the producer was not represented by a milk buyer or handler that provided an approved sample analysis and reporting service, it would be the producer's responsibility to ensure that the proper number of samples were submitted to an approved laboratory for analysis and that the results were reported to the department. In all situations, it would ultimately be the producer's responsibility to ensure that a minimum of four official sample results for the previous six months' production were reported to the department. The test results would be reported to the department as requested.

Sediment content. Methods for determining sediment content of milk would have to be those described in "standard methods." Sediment content would be based on comparison with official USDA standards. If the sediment disc was classified as no. 1, no. 2, or no. 3, the producer's milk could be accepted. If the milk contained more sediment than a no. 3, it would be rejected.

Pasteurization. Only pasteurized milk and milk products could be sold or provided to the final consumer, except that unpasteurized milk could be consumed by a producer's on-farm family members. All milk would have to be pasteurized according to the requirements and time-temperature relationships described in the PMO. All dairy plant by-products used for feeding purposes for farm animals would have to be pasteurized or be derived from pasteurized products.

Sell-by date. Administrative rules promulgated by the department currently make requirements concerning a recommended last day of sale of milk and milk products. The bill would require each processor and manufacturer of milk products sold in the state to place on each container of milk products a recommended last day of sale by month and date. The sell-by date would have to be expressed by the first three letters of the month followed by the numeral designating the appropriate calendar day or by expressing the calendar month numerically followed by a numeral designating the calendar day. The sell-by date would have to appear on that part of the container that was most likely to be displayed, presented, or shown under customary display conditions of sale. However, a cup container could have the sell-by date on the bottom. The date on the container would have to be legible and could not interfere with the legibility of other information required to be on the product. Milk and milk products could not be offered for sale after the sell-by date unless they were advertised to the final consumer in a prominent manner as being beyond the recommended last day of sale; the final seller would be responsible for the proper advertisement of such products.

Processors and manufacturers of milk products would have to register with the department-on a form provided by the department-the assigned sell-by date of each milk and milk product processed and the length of time between production and the sell-by date. Plant records of a testing program conducted by the processor or manufacturer would have to substantiate the length of time. The following information would also have to be provided on the form: the method of application and location of the sell-by date for each size and style of container and changes in the time interval of the sell-by date prior to the effective day of the change. Milk products would have to maintain nutritional levels prior to the sell-by date, and the director would periodically sample and analyze milk products to ensure that the flavor had not changed prior to the sell-by date. Milk products obtained for analysis by the director prior to the sell-by date would have to be stored at a temperature of 43-45 degrees Fahrenheit until analyzed. The processor or manufacturer of milk or milk products that did not maintain their flavor until the sell-by date would have to make changes necessary to improve product quality or alter the date so as to comply with the law, unless the nutritive value loss or flavor deterioration of the products could be determined to have been caused by mishandling, improper storage, or lack of refrigeration at points beyond his or her control.

House Bill 4829. The following provisions would apply specifically to House Bill 4829. The bill would repeal the Manufacturing Milk Act, which is currently the core law regulating manufacturing milk and manufactured dairy products. The bill would repeal other acts and rescind certain rules of the Administrative Code, governing manufacturing milk and manufactured dairy products, effective 30 days after the bill's enactment, as specified below. The summary below emphasizes differences between the Manufacturing Milk Act and the bill, and "the law" and "the act" refer specifically to the Manufacturing Milk Act unless explicitly stated otherwise. Also, "milk and milk products" refers specifically to manufacturing milk and manufactured dairy products unless explicitly stated otherwise. Some provisions are similar to those in House Bill 4820, in which case the summary highlights differences between the bills.

The bill would repeal twelve laws-in addition to the Manufacturing Milk Act-and rescind six sections of the administrative code effective 30 days after the bill's enactment. The repealed laws (and the subjects they concern) include:

· P.A. 167 of 1899 (Dairy and Food Commissioner)

· P.A. 243 of 1903 (renovated butter)

· P.A. 257 of 1911 (opening or interfering with milk bottles)

· P.A. 63 of 1913 (oleomargarine or margarine)

· P.A. 93 of 1915 (pasteurization of milk by-products)

· P.A. 30 of 1923 (cheese)

· P.A. 212 of 1935 (the Milk Fat Test Law)

· P.A. 155 of 1939 (overrun in manufacture of butter)

· P.A. 293 of 1945 (pasteurization of milk and other dairy products)

· P.A. 211 of 1955 (butter grading and labeling)

· P.A. 45 of 1967 ( pasteurization of milk and milk products)

· P.A. 298 of 1968 (the Frozen Desserts Act of 1968)

The rescinded rules of the Administrative Code (and the subjects they concern) include:

· R 285.400.1 (ice cream)

· R 285.402.1 (licensing of test operators and use of "Babcock Test")

· R 285.404.1 (grading butter)

· R 285.405.1 to 285.405.29 (frozen desserts)

· R 285.407.1 to 285.407.6 (milk manufacture)

· R 285.409.1 (producer security)

General authority. The department would be responsible for administering the act, promulgating rules for its implementation and enforcement, and adopting revisions of standards incorporated by reference in the act. The department's director would be required to foster and encourage the dairy industry of the state and to investigate the general conditions of dairy farms, dairy plants, single service manufacturers, receiving stations, transfer stations, bulk milk haulers/samplers, can milk trucks, milk tank trucks, milk tank truck cleaning facilities, and distributors. The director would be given full power to enter any premises for investigation, and could appoint inspectors to assist him or her, with the object of improving the quality and creating and maintaining uniformity of the dairy products of the state. Further, the director could cause instruction to be given to dairy farms and plants, single service manufacturers, stations, distributors or to any locality in the state, in order to ensure that proper procedures for manufacturing, processing, and otherwise handling manufacturing milk and dairy products were followed.

Federal standards. Federal regulations from the Code of Federal Regulations would be adopted by reference for: sanitation (7 CFR 58); sanitizing agents (21 CFR 178.1010); commercial sterility and sterilized or aseptic milk and dairy products processing (21 CFR 113); examination of dairy products (7 CFR 58); cheese manufacture (21 CFR 133); and labeling (21 CFR 101; 9 CFR 317; 9 CFR 381, subpart N). In addition, the sanitary standards of the 3-A Sanitary Standards Committees published by the International Association for Food Protection would be adopted by reference. USDA standards for dairy equipment construction, dated 2001, entitled "USDA Guidelines for the Sanitary Design and Fabrication of Dairy Processing Equipment" and the FDA standards for dairy equipment construction, dated 2000, entitled "Milk and Milk Product Equipment, A Guide for Evaluating Construction" would be incorporated by reference. Standards for sanitizing agents complying with the federal Food, Drug, and Cosmetic Act would also be incorporated by reference.

Unsanitary, adulterated, and misbranded milk. The bill would prohibit a person from selling or offering for sale, possessing or controlling with intent to sell or offer for sale, or furnishing an unsanitary, adulterated, or misbranded milk or dairy product to a person or processor. The law currently contains such a prohibition with regards to unsanitary milk or dairy products, but the bill would add the prohibition on adulterated or misbranded milk and dairy products, reflecting the increased emphasis on adulteration and misbranding in the Food Law of 2000. (Definitions of "adulterated" and "misbranded" would be taken from the Food Law of 2000.)

Quality standards. The law currently provides quality standards for raw milk, frozen desserts, and instant nonfat milk. In general, the bill would maintain, or slightly increase the requirements for these products. A significant change is the requirement that raw milk for use in frozen desserts meet Grade A standards. The bill would also include chemical, physical, bacteriological, and temperature standards, in table form, for pasteurized condensed milk and condensed skim milk; dry whole milk, extra grade; dry whole milk, standard grade; nonfat dry milk, extra grade; nonfat dry milk, standard grade; whey for condensing; pasteurized condensed whey; dry whey, extra grade; dry whey, dry whey products; dry buttermilk and dry buttermilk products, extra grade; dry buttermilk and dry buttermilk products, standard grade; butter, whipped butter; pasteurized milk, cream, fluid dairy products for frozen desserts; sterilized or aseptic products; private water supplies for dairy farms and dairy plants; recirculated cooling water (sweet water); glycol for cooling; and condensate recovery water (cow water). (The standards are found in a table on pages 21-29 of the bill.)

Inspection frequency. Currently the law does not specify the frequency with which the department must inspect dairy farms or dairy plants. The bill would require the department to inspect all dairy farms every 12 months and dairy plants every six months.

Soft serve exemption. Frozen desserts manufactured from pasteurized mix in the soft form at retail food establishments licensed under the Food Law of 2000 would be exempt from the bill's provisions.

Dairy product and water testing frequency. Currently the law does not specify how often dairy products, well water samples for dairy farms, water supplies for dairy plants, and recirculated water or recirculated cooling mediums are to be tested. The bill would specify that all dairy products be tested at least four out of every six months, unless the water supply was not new or reconstructed after April 1, 1994, in which case they would have to be tested annually. Well water samples would have to be tested a minimum of once every three years. Water supplies for dairy plants would have to be tested at least once every six months. Recirculated water or recirculated cooling mediums would have to be tested at least once every six months. The bill would also prohibit the use of condensate recovery water except in applications that conform to requirements and procedures accepted by the FDA or the director. The law does not-and the bill would not-specify how frequently dairy farm milk would have to be collected.

License/permit. Currently, the law requires milk plants, dairy farms, receiving stations and transfer stations, and bulk milk hauler/samplers to apply for and receive a license or permit. The bill would expand this requirement to include all persons who produce, transport, wash milk tank trucks, process, manufacture, label or sell manufacturing milk and dairy products or manufacture single service containers and closures. Current law does not address the possibility of an overlap between licensing requirements made in the Fluid Milk Act of 1965 and the Manufacturing Milk Act. The bill would specify that a person licensed or permitted under the Grade A Law of 2001, and who was performing activities regulated under that act, would be exempt from the licensing requirement of the Manufacturing Milk Law of 2001. A person licensed under the Grade A law would have to comply with the requirements of, and would be subject to the penalties set forth in, the Manufacturing Milk Law of 2001. In accordance with current law, the director could issue a temporary license or permit. The bill would retain the current law's requirement that an applicant for an initial license as a dairy plant must apply to the department on a department-supplied form and provide a statement containing specific information.

Drug residue avoidance education. The bill would add a requirement that an applicant for an initial manufacturing grade dairy farm permit had to complete education on drug residue avoidance control measures acceptable to the director before receiving the permit.

License/permit fees. Currently the law establishes annual license fees of $50 for a dairy plant, $50 for a receiving station or transfer station, and $10 for a bulk milk hauler/sampler; there is no fee for a dairy farm. The bill would retain the $50 license fee for a dairy plant and would continue to charge no fee for a dairy farm. The bill would distinguish between a receiving or transfer station that was part of a dairy plant and a station that was a stand-alone facility. A receiving or transfer station that was part of a dairy plant would be licensed or permitted as part of the dairy plant, while a stand-alone facility would be licensed or permitted for $50 per year. A milk tank truck cleaning facility would be licensed or permitted as part of a dairy plant, receiving station, or transfer station, or as a stand-alone facility; a stand-alone facility would have to pay a $50 annual licensing fee. A single service container and closure manufacturer could be licensed as part of a dairy plant or as a stand-alone manufacturer; each stand-alone facility would be licensed for $50 per year. Each milk tank truck or can milk truck would have to be licensed or permitted at a rate of $10 per year.

Bulk milk hauler/samplers, as well as any milk tank truck cleaning facility that washed the milk contact surfaces of milk tank trucks used to haul Grade A milk, would have to be licensed under the Grade A law. A person could not pick up manufacturing grade milk in a farm pickup milk tank from a farm bulk milk tank without a hauler/sampler license issued by the department under the Grade A law.

Previously denied applicants. The bill would retain the current law's requirement that the department investigate the sanitary conditions of a dairy plant or place of business, upon receiving a license application from an unlicensed dairy plant or from a plant that was previously denied a license. Currently the law prohibits the director from issuing a license if he or she determines that the facilities do not meet the law's sanitary standards. The bill would instead state that the director must issue a license under the act upon determining that the sanitary conditions of the applicant's plant or place of business did comply with the act and rules and regulations promulgated under the act.

Revocation/suspension of license/permit. The bill would retain the current law's provision allowing the director to revoke or suspend a license or permit. Instead of specifying procedures, the bill would refer to the general procedures set forth in the Administrative Procedures Act of 1969, with one exception: the bill would continue to specify that the department must notify in writing each producer with whom a dairy plant does business regarding the pendency of the administrative action not less than five days before the date of a formal hearing. The law lists grounds for the revocation or suspension of a license. The bill would clarify that any of the offenses justify revoking or suspending a license or charging an administrative fine. In addition to the offenses that the law currently mentions, the bill would add the following: in the case of a dairy plant, failure to provide a required security device; adulteration of milk or dairy products; failure to provide the required number of milk quality sample results as established by the department; failure to correct violations of the act noted on inspection reports after being given a reasonable amount of time; and failure to pay a final civil or administrative fine issued under the act.

Beta lactam drug residue testing. The bill would add a requirement that all milk that either was shipped for processing or would be processed on the farm where it was produced be sampled and tested for beta lactam drug residues prior to processing. The department would be responsible for establishing procedures for collecting, handling, and testing samples. A load sample would be taken from the bulk milk pickup tanker after its arrival at the plant and prior to further commingling and processing. A load sample representing all can milk received on a shipment would be collected at the plant, using a procedure that included milk from every can. A load sample taken by the processor would be collected at the plant using a sampling procedure that included all milk produced and received. A sample that tested positive would be retained according to standards established by the department. The records of all sample test results would have to be retained for at least 12 months. If a load sample tested positive for a violative drug residue, industry personnel would be required to notify the department immediately of the positive result and of the intended disposition of the contaminated milk. All milk testing positive would be disposed of in a manner that removed it from the human and animal food chain, unless it was acceptably reconditioned. Each individual producer sample represented in the violative drug residue load sample would be singly tested to determine the producer of the contaminated milk. The department would notified immediately upon determination of the identity of the producer responsible for producing the milk. The producer identified as the source of milk testing positive for a violative drug residue would be prohibited from shipping milk until a sample from a subsequent milking did not test positive for a violative drug residue. The dairy plant or receiving station responsible for a violative drug residue test would have to deliver a copy of the test result to the department within ten days after the dairy plant or receiving station received the result. The producer would be required to ensure that the department was provided with the required number of producer's milk quality test results. Finally, the plant or station would have to maintain an original copy of the test result for at least one year.

Drug residue test failure/fine. Currently the director is required to impose on a producer who violates the law by selling or offering for sale milk which has a positive reaction to a drug residue test as follows: $50 for the first positive test within a 12-month period; $200 for the second positive test within a 12-month period; and $500 for the third positive test within a 12-month period. The standard penalty scheme, which imposes a fine of $50-$500 and a jail sentence of up to 90 days as outlined above only applies to a producer who sells or offers for sale milk that has tested positive for drug residues under the following conditions: the producer must fail to pay a drug residue fine within ten days of being notified of the violation or must have been fined three times within a 12-month period.

The bill contains extensive provisions for penalizing producers who sold or offered for sale milk that had been found positive for violative drug residues on a drug residue test performed pursuant to the Manufacturing Milk Act of 2001. The provisions would be identical to those described above in the case of milk that was found positive for drug residues on a drug test performed pursuant to the PMO, as would be required by House Bill 4820, with one exception: the fines for the first, second and third positive results on drug residue tests performed pursuant to the Manufacturing Milk Act of 2001 would remain $50, $200, and $500, respectively. The fines would only apply if the violative shipment did not cause partial or total loss of a load of milk. If this occurred, the producer would have to pay, directly to the milk buyer, an administrative fine equal to the lost value of the milk on the entire contaminated load and any costs associated with the disposition of the load.

Tuberculosis and brucellosis. Currently the law specifies that a person who offers milk to the public for human consumption must obtain the milk from cows or goats that are located in areas under federal or state supervision for the eradication of tuberculosis and brucellosis. The bill would allow milk offered to the public for human consumption to be obtained from sheep as well, and would consistently refer to "dairy animals" where current laws and rules refer simply to "cattle" or to "cows and goats" collectively. More significantly, the bill would require that any dairy animals officially classified as tuberculosis reactors were milked last or in separate equipment. Further, the milk from these animals could not be used or sold for human or animal consumption.

Prohibited sale of milk. Currently the law prohibits a person from selling or offering for human consumption milk that the person knows to be defective in certain ways. In addition to those defects specified under current law, the bill would prohibit the sale or offering of milk that did any of the following: showed signs of being bloody, ropy, or clumpy; was not normal and fresh in odor or appearance or contained excessively coarse sediment when examined organoleptically, visually, or by an accepted test procedure; contained excessive sediment as determined by sediment test methods provided in standard methods for the examination of dairy products and classified to USDA sediment standards as more than a no. 3; exceeded legal temperature, bacterial, or somatic cell limits. (Sec. 130(2), MCL 288.102a)

Requirements on persons, equipment, and facilities. The law currently places many specific requirements on persons, equipment, and facilities involved with the manufacture, processing, and handling of manufacturing milk and dairy products. The bill would retain most of these requirements; changes are highlighted below.

Milker requirements. The law currently specifies that the milker must cool milk that is stored in a dairy farm bulk tank to 45 degrees Fahrenheit or less within two hours of milking. (All temperature requirements would be given in both Fahrenheit and Celsius.) After reaching this temperature, the milk may be maintained at a temperature of not more than 50 degrees. The bill would require the milker to cool milk that was stored in a dairy farm bulk tank to 50 degrees Fahrenheit within four hours or less of the commencement of the first milking, and to 45 degrees Fahrenheit or less within two hours after milking, provided that the blend temperature after the first milking and subsequent milkings did not exceed 50 degrees Fahrenheit. The milker would still be required to cool and store milk that was contained in cans and that was used exclusively for cheese manufacturing at 60 degrees Fahrenheit or lower at the farm within two hours after the milking, except for milk that was delivered to a processing plant within two hours after the milking. The bil