(H.B. 3134) (No. 278) (Approved December 19, 2002) AN ACT To amend Subsections (b) and (e) of Section 8 of Act No. 34 of June 11, 1957, to restructure the Administrative Board of the Milk Industry Development Fund, and eliminate the economic contribution to said fund from milk producers; and to add a new Subsection (g) to said Section in order to establish the powers as a juridical person of the Administrative Board of the Milk Industry Development Fund. STATEMENT OF MOTIVES The milk production, processing and distribution in Puerto Rico has suffered dramatic changes since the Legislature issued the public policy of the Commonwealth of Puerto Rico when regulating said activities through Act No. 34 of June 11, 1957, as amended, ( Act No. 34 ). Act No. 34 created the Milk Industry Development Fund ( the Fund ), which was originally supported by contributions from the twenty-two (22) milk producers that existed in Puerto Rico when Act No. 34 was approved, and numerous milk processors. These contributions to the Fund were used for different purposes, including promoting the consumption of fresh milk, with no mention of any specific brand, to protect small and medium producers that do not have the means to promote their brand name. Nowadays, for several reasons, the milk production industry has only two processing companies, both located in the San Juan metropolitan area. This fact makes it unnecessary to maintain the processors contribution to the Fund because it is more effective that they promote their own brands because it allows consumers to directly associate the quality of a product
with the company that produces it. Therefore, the processors contribution to the Fund is hereby eliminated, so that said processors may use these funds to promote their own brand names. At the same time, producers contributions and the flexibility of the Act remain, under which, the Administrator may increase producers contributions pursuant to Act No. 34. At present, milk producers and processors choose four (4) members, respectively, to the Administrative Board of the Milk Industry Development Fund. Acknowledging the elimination of processors contributions to the Fund, this Act reorganizes the Administrative Board of the Milk Industry Development Fund to bring it up to date with the realities of today s milk production, processing and distribution. Therefore, members for the sector representing milk processors are reduced from four (4) to one (1) for each milk processor, up to a maximum of two (2) members; while two (2) members are added, who shall be individual citizens chosen by the Secretary of Agriculture; and members of the sector representing milk producers are increased from four (4) to five (5) members. This reorganization in the distribution of the Administrative Board members shall broaden the Board s vision by integrating two (2) representatives from other private sectors who have the best capacity and most experience in fiscal, planning, managerial and technical matters, who are committed to the public policy of promoting the consumption, production, processing and distribution of fresh milk and its by-products, which are fundamental for the health of the people of Puerto Rico. In addition, this reorganization of the members of the Board representing processors, allows that the distribution of the Board be made in accordance with Section 8(e) of Act 34, which provides that not more than three (3) members may be processors from plants located in the metropolitan
area, a fact that the current Board does not comply with, because it has four (4) members of the only two (2) existing processors, both located in the metropolitan area. Finally, to grant to the fund the necessary tools to continue with the development of the milk industry, this Act grants the Fund all corporate powers granted to public corporations by the laws of Puerto Rico. Said powers shall not be incompatible with those set forth in Act No. 34. BE IT ENACTED BY THE LEGISLATURE OF PUERTO RICO: Section 1.- Subsections (b) and (e) of Section 8 of Act No. 34 of June 11, 1957, are hereby amended, to read as follows: Section 8.- Milk Industry Development Fund; Administrative Board (a) (b) The Fund shall be supported by contributions from milk producers at the rate of one-half (1/2) cent for each quart of milk produced and accepted by the processors for pasteurizing. Milk producers shall pay said contribution, according to the quarts of milk produced and accepted by the processors for pasteurizing. (c) (d) (e) All monies in the Fund shall be deposited in those banking institutions chosen by the Board, but which shall be acknowledged as depositories of funds of the Commonwealth of Puerto Rico, but they shall be kept in an account or accounts under the name of the Fund. The collections and disbursements shall be made in accordance with the regulations adopted by the Administrative Board. The disbursements shall not be subject to a preliminary audit by the Secretary of the Treasury. Besides the Administrator,
who shall be its Chairman, the Administrative Board which shall administer the Fund, shall be composed of: (i) five (5) representatives of the producers; (ii) one (1) representative of each processor up to a maximum of two (2) representatives, and (iii) two (2) private citizens. These nine (9) members shall be appointed by the Secretary and chosen as follows: (i) the five (5) members representing the producers shall be chosen by ballot by the Farmers Association of Puerto Rico at a meeting called for such purposed and presided over by said Association; (ii) the members representing the processors shall be chosen from the recommendations submitted by each processor, providing, however, that in the future, if said group has three (3) or more bona fide members, the representation of said group to the Board shall be composed of a maximum of two (2) members chosen by ballot by the processors; and (iii) the two (2) private citizens shall be chosen by the members of the Board producers and processors, and shall be persons of good reputation and acknowledged experience in managerial or professional matters. The Administrator shall be an ex-officio member and Chairman of said Administrative Board; provided that he/she shall only vote when needed to break the deadlock in decisions made by the Administrative Board. Section 2.- A new Subsection (g) is hereby added to Section 8 of Act No. 34 of June 11, 1957, as amended to read as follows: (g) The Milk Industry Development Fund, through its Administrative Board, may exercise all those corporate powers, which are not incompatible with those expressed herein, that are granted to private corporations through
the laws of Puerto Rico, and to carry out all those powers, in and out of Puerto Rico, to the same extent any natural or juridical person could or would do. Section 3.- Severability Should any provision, word, sentence, subsection or Section of this Act be judicially invalidated for any reason, or declared unconstitutional or null, said decision shall not affect, impair nor invalidate any of the remaining provisions. Section 4.- Transitory Provisions (a) On or before sixty (60) days after the effective date of this Act, the Secretary shall proceed to appoint to the Administrative Board the two (2) representatives of the processors, the (2) members designated as private citizens, and the additional member representing the producers, pursuant to the provisions of this Act. (b) The members of the current Administrative Board, previously chosen in representation of the processors, shall remain as such and shall carry out their duties until the new members of the Administrative Board, mentioned in the preceding paragraph, take up their posts. Section 5.- Effectiveness This Act shall take effect immediately after its approval.
CERTIFICATION I hereby certify to the Secretary of State that the following Act No. 278 (H.B. 3134) of the 4 th Session of the 14 th Legislature of Puerto Rico: AN ACT to amend Subsections (b) and (e) of Section 8 of Act No. 34 of June 11, 1957, to restructure the Administrative Board of the Milk Industry Development Fund, and eliminate the economic contribution to said fund from milk producers; and to add a new Subsection (g) to said Section in order to establish the powers as a juridical person of the Administrative Board of the Milk Industry Development Fund, has been translated from Spanish to English and that the English version is correct. In San Juan, Puerto Rico, today 13 th of August of 2004. Elba Rosa Rodríguez-Fuentes Director