§157-34  Determination of quotas.  (a) To promote a proper balance between supply and demand for milk, the board shallprovide that the price to be paid to producers shall be based upon quotaassigned each producer by the board, which quota shall be determined asfollows:  upon petition or chairperson's motion as set out in section 157-31,there shall be established an initial quota for each producer andproducer-distributor, which shall be the average of the amount of milk that theproducer or producer-distributor produced and delivered during the three-yearperiod prior to January 1, 1967; provided that if a producer orproducer-distributor had not been in business for such period, the board mayalso take into account the producer's or producer-distributor's priorproduction, contract and the producer's or producer-distributor's investment;and provided further that in any milk shed established subsequent to January 1,1971, the board shall establish an initial quota for each producer andproducer-distributor which shall be the average of the amount of milk that theproducer or producer-distributor produced and delivered during the twelve-monthperiod immediately prior to the date of petition or chairperson's motion, andmay also take into account prior production, contract and investment factorswhere any of the producers or producer-distributors shall not have been inbusiness for such twelve-month period.  The board shall set the initial quotaof a newly licensed producer or producer-distributor entering the market bytaking into account all relevant market conditions and the capabilities of thelicensee.  The board may adjust the initial quotas on a pro rata basis to meetchanges in market requirements.

(b)  For each milk shed in which quota controlor price control or both is to be established, producers orproducer-distributors whose dairies are located outside such milk shed shallparticipate in said quota control or price control, or both, for milk regularlysupplied within the affected milk shed.  However, in setting the minimum pricefor the milk the board shall consider only those costs incurred by producerslocated within the affected milk shed.  Any milk delivered and utilized in amilk shed shall be subject to all the provisions and regulations applicable tothat milk shed.

(c)  When the amount of milk resold for humanconsumption as fluid milk does not exceed the sum of the quotas to be regularlysupplied a distributor or producer-distributor, such fluid consumption milkshall be deemed taken ratably from the quotas actually supplied, and paymentshall be made accordingly.  The board shall determine which producers, notunder written contract with a distributor or producer-distributor, are regularsuppliers of milk.  The remaining milk not used for human fluid consumptionshall be paid for according to its use.  However, when the producer-distributoror distributor resells milk, other than recombined or reconstituted milk, forfluid consumption in an amount in excess of all quotas assigned producers orproducer-distributors regularly supplying the producer-distributor ordistributor milk, then the fluid consumption prices shall apply pro rata tosurplus milk, in the ratio that a producer's quota bears to the sum of thequotas.  However, whenever there is quota milk available for purchase withinthe milk shed, surplus milk may not be used as milk to be resold for humanconsumption as fluid milk.

(d)  From time to time when required to meetchanges in conditions, the board may alter, revise, or adjust the total quotain any milk shed by rule, pursuant to section 157-31(a)(1), or by order,without regard for the notice and public hearing requirements of chapter 91,based on [the] specific formulas or criteria adopted under section157-31(a)(2).  An order to alter, revise, or adjust the total quota for theproduction of milk in a milk shed shall be subject to the notice requirementsset forth in sections 157-33(a)(1) and 157-33(a)(2) for an order fixing minimumprices or salvage values.

(e)  The board may adopt rules governing thetransfer of quotas. [L 1967, c 260, §23; HRS §157-34; am L 1971, c 184, pt of§4; ree and am L 1972, c 40, pt of §2; gen ch 1985, 1993; am L 1997, c 118,§§4, 6; am L 1998, c 19, §1; am L 2008, c 46, §3]

 

Cross References

 

  Rulemaking, see chapter 91.