Sec. 48.
The department shall notify producers delivering milk to a licensed milk plant any time a license is issued, renewed, or modified. The notice sent by the department shall substantially conform to the following:
“Michigan law requires milk plant licensees to demonstrate a reasonable degree of financial responsibility to the Michigan department of agriculture. This act is designed to provide reasonable assurance that producers will be paid for their milk; however, it does not guarantee that producers will be paid. Each producer has some responsibility for determining the credit-worthiness of the milk plant to which the producer is selling milk. A milk plant licensee may qualify for a license by doing 1 of the following:
(a) Filing financial statements audited by a certified public accountant with the department demonstrating that the milk plant meets the minimum liquidity requirement.
(b) Filing security with the department in an amount determined by the department to be the greater of the following:
(1) The value of the greatest milk receipts that the milk plant received within a consecutive 30-day period during that milk plant’s most recent fiscal year.
(2) The greatest milk receipts that the milk plant is anticipated to receive during a 30-day period within the licensing period.
(c) ____________________, (name of milk plant licensee) is currently licensed on the basis of its audited financial statement meeting the minimum liquidity requirement of a current ratio of at least 1.20 to 1 current assets to current liabilities. The licensee’s most recent year-end financial statement audited by the firm of ____________________ (auditor’s name) meets the following minimum liquidity requirement, (or) ____________________ (name of milk plant licensee) has filed security with the department to secure payment to producers. The maximum amount of security is the amount determined to be the greater of the following:
(1) The value of the greatest milk receipts that the milk plant received within a consecutive 30-day period during that milk plant’s most recent fiscal year.
(2) The greatest milk receipts that the milk plant is anticipated to receive within a 30-day period within the licensing period, whichever is greater.
The security filed is in the following form or forms and in the amount of: _____________________
_________________________________________________________________________
_________________________________________________________________________”.
History: 2001, Act 266, Eff. Feb. 8, 2002