Chap. 357.—An ACT to provide for the supervision, regulation and control of
the production, processing, transportation, storage, distribution, and sale of
milk and cream; to create a Milk Commission and local milk boards and to
define and provide for the functions, duties and powers thereof; to provide
for the appointment, suspension, removal, compensation, costs, and expenses of
such commission and boards and the members, officers, agents and employees
thereof; to provide for licensing processors, bottlers, wholesalers, distributors,
and retailers of milk and cream, or either; to provide for the raising of
funds for the administration of this act and to provide for the disposition of
revenue collected hereunder and to impose penalties for violations of the
provisions of this act. | [H B 396]

Approved March 29, 1934

Whereas, the production and distribution of milk and cream is an
industry upon which, to a substantial degree, the prosperity and health
of the people of the Commonwealth of Virginia depend; and the present
economic emergency is in part the result of the disparity between the
prices of milk and cream and other commodities, which disparity has
diminished the power of milk producers to purchase industrial products,
has broken down the orderly production and marketing of milk and
cream, and has seriously impaired the agricultural assets supporting the
credit structure of the Commonwealth and local political sub-divisions
thereof ; and

Whereas, unhealthful, unfair, unjust, destructive and demoralizing
economic trade practices have grown up, and are now carried on in the
production, sale and distribution of milk, and milk and cream products
in the Commonwealth, which impair the dairy industry in the Common-
wealth, and the constant supply of pure wholesome milk to the inhabi-
tants thereof, and constitute a menace to the health and welfare of the
inhabitants of the Commonwealth; and

Whereas, in order to protect the well-being of the people of the
Commonwealth of Virginia, and to promote the public welfare, public
1ealth and public peace, the production, transportation, processing,
torage, distribution, and sale of milk and cream in the Commonwealth
yf Virginia, is hereby declared a business affecting the public peace,
iealth and welfare, which should be supervised and controlled in the
sxercise of the police power of the Commonwealth in the manner here-
nafter provided ; now, therefore,

1. Be it enacted by the General Assembly of Virginia, as follows:

Section 1. Definitions—As used in this act, unless otherwise stated
und unless the context or subject matter clearly indicates otherwise:

“Person” means any person, firm, corporation or association.

“Commission” means the milk commission created by this act.

“Distributor” means any of the following persons engaged in the
business of distributing, marketing, or in any manner handling fluid
milk, in whole or in part, in fluid form for consumption in the Common-
wealth of Virginia:

I. Persons, irrespective of whether any such person is a producer:

(a) who pasteurize or bottle milk or process milk into fluid milk ;
(b) who sell and/or market fluid milk at wholesale or retail
(1) to hotels, restaurants, stores or other establishments
for consumption on the premises
(2) to stores or other establishments for resale, or
(3) to consumers ;
(c) who operate stores or other establishments for the sale of
fluid milk at retail for consumption off the premises.

II. Persons wherever located or operating, whether within or with-
out the Commonwealth of Virginia, who purchase, market or handle
milk for resale as fluid milk in the Commonwealth of Virginia.

“Producer” means any person, irrespective of whether any such per-
son is also a distributor, who produces milk for sale as fluid milk in the
Commonwealth of Virginia.

“Producer-distributor” means a distributor who handles only milk
produced by himself.

“Consumer” means any person, other than a milk distributor who
purchases milk for human consumption.

“Market” means any city, town or village of the Commonwealth,
or two or more cities and/or towns and/or villages and surrounding
territory designated by the commission as a natural marketing area.

“Licensee” means a licensed milk distributor.

“Milk” means the clean lacteal secretion obtained by the complete
milking of one or more healthy cows properly fed, housed and kept:
including milk that is cooled, pasteurized, standardized or otherwise
processed with a view of selling it as fluid milk, cream, buttermilk
(either cultured or natural buttermilk, and including cultured whole
milk in its several trade forms) and skimmed milk; said term excludes
the lacteal secretion of one or more dairy animals where lacteal secretior
is sold or intended to be sold for any other purpose.

“Subsidiary” means any person of, or over whom or whieh a dis:
tributor or an affiliate of a distributor has, or several distributors col-
lectively have, either directly or indirectly, actual or legal control
whether by stock ownership or in any other manner.

“Affiliate” means any person and/or subsidiary thereof, who has
either directly or indirectly, actual or legal control, over a distributor.
whether by stock ownership or in any other manner.

“Board” means the local agency authorized by this act to administer
the operation of the act in each market area operating under the pro-
visions of this act, to be known as the “milk board” of the particular
market area in which it functions.

“Books and records” means books, records, accounts, contracts,
memoranda, documents, papers, correspondence, or other data, pertain-
ing to the business of the person in question.

“Health authorities” includes the State Board of Health, the Vir-
ginia Dairy and Food Division of the State Department of Agriculture
and Immigration and the Director thereof, and the local health authori-
ties.

“Sanitary regulations” includes all laws and ordinances relating to
the production, handling, transportation, distribution and sale of milk
and, so far as applicable thereto, the State sanitary code and lawful
regulations adopted by the dairy and food divisions, or by the board
of health of any county or municipality.

Section 2. Milk Commission.—(a) There is hereby created a Milk
Commission, consisting of three members, two of whom shall be pro-
ducers of milk who are not directly or indirectly engaged in the distri-
bution thereof and the third member shall have no connection financially
or otherwise with the production or distribution of milk or products
derived therefrom, who shall be appointed by the Governor of Virginia
to hold office at the pleasure of the Governor and may be removed at
any time by the Governor. Any vacancies occurring shall be filled by
appointment by the Governor. One member of said commission shall
act as chairman, as designated by the Governor. The technical and
other services for such commission shall be performed, so far as practi-
cable, by forces and officers in the Department of Agriculture and Im-
migration, the Virginia Agricultural Extension Division of the Vir-
ginia agricultural experiment station, without additional compensation.
The Milk Commission may appoint and, at pleasure, remove the secre-
tary of the Milk Commission and any such additional technical and
other assistants and employees as may be necessary to carry out the
provisions of this act, and to prescribe their powers and duties.

(b) The members of the Milk Commission shall be paid each the
sum of ten dollars per day for each day actually spent in the per-
formance of their official duties, plus their actual and necessary ex-
penses.

c) The commission shall fix the compensation of the secretary
of the Milk Commission and other employees .

d) The secretary shall, subject to the limitations herein contained
and the rules and regulations of the commission, enforce the provisions
of this act, but no official act shall be taken, rule or regulation be pro-

mulgated, or official order made or enforced, with respect to the pro-
visions of this act, without the approval of the majority of the mem-
bers of the commission.

(e) The principal offices of the commission shall be in the city of
Richmond, in rooms assigned by the Director of the Division of Grounds
and Buildings.

(f£) Two members of the commission shall constitute a quorum.

Section 3. Powers.—The commission is hereby declared to be an
instrumentality of the Commonwealth, vested with power:

(a) To confer and to co-operate with the legally constituted authori-
ties of other states and of the United States, with a view of securing
a uniformity of milk control, with respect to milk coming into the
Commonwealth and going out of the Commonwealth in interstate com-
merce, with a view of accomplishing the purposes of this act, and to
enter into a compact or compacts for such uniform system of milk con-
trol.

(b) To investigate all matters pertaining to the production, proc-
essing, storage, transportation, distribution and sale of milk in the Com-
monwealth of Virginia.

(c) To supervise, regulate, and control the production, transporta-
tion, processing, storage, distribution, delivery and sale of milk for con-
sumption within the Commonwealth of Virginia.

(d) To act as mediator or arbiter in any controversial issue that may
arise among or between milk producers and distributors, as between
themselves, or that may arise between them as groups.

(e) To examine into the business, books and accounts of any milk
producer, association or producers, or milk distributors, their affiliates
or subsidiaries; to issue subpoenas to milk producers, associations of
producers, and milk distributors, and to require them to produce their
records, books and accounts; to subpoena any other person from whom
information is desired. ,

(f£) To take depositions of witnesses within, or without, the Com-
monwealth. Any member of the commission, or any employee desig-
nated by the commission, may administer oaths to witnesses and sign
and issue subpoenas.

(g) To make, adopt and enforce all rules, regulations and/or orders
necessary to carry out the purposes of this act. Every rule or order of
the commission shall be posted for inspection in the main office of the
commission, and a certified copy filed in the office of the Commissioner
of Agriculture. An order, applying only to a person or persons named
therein, shall be served on the person or persons affected. An order,
herein required to be served, shall be served by personal delivery of a
certified copy, or by mailing a certified copy in a sealed envelope,
with postage prepaid, to each person affected thereby; or, in the case
of a corporation, to any officer or agent of the corporation upon whom
legal process may be served. The posting in the main office of the
commission of any rule and of any order, not herein required to be
served, and such filing in the office of the Commissioner of Agriculture,
shall constitute due and sufficient notice to all persons affected by such
rule or order. 7

(h) The operation and effect of any provision of this act conferring
a general power upon the commission shall not be impaired or qualified
by the granting to the commission by this act of a specific power or
powers.

(1) The commission shall not exercise its powers in any market
until a public hearing has been held for such market, and the commission
determines that it will be to the public interest that it shall so exercise
its powers in such market. The commission may on its own motion, call
such hearing, and shall call such hearing upon the written application
of a producers’ association organized under the co-operative marketing
act of the Commonwealth of Virginia, supplying in the judgment of
the commission a substantial proportion of the milk consumed in such
market, but if no such producers’ association exists on said market, the
commission shall call such hearing upon the written application of
producers supplying a substantial proportion of the milk consumed in
said market; and shall call such hearing upon the written application of
distributors, distributing a substantial proportion of the milk consumed
in such market. Such hearing may be held at such time and place and
after such notice as the commission may determine.

The commission may withdraw the exercise of its powers from any
market after a public hearing has been held for such market, and the
commission determines that it will be to the public interest to withdraw
the exercise of its powers from such market. The commission may on
its own motion, call such hearing, and shall call such hearing upon the
written application of a producers’ association organized under the co-
operative marketing act of Virginia, supplying in the judgment of the
commission, a substantial proportion of the milk consumed in such
market, but if no such producers’ association exists on said market, the
commission shall call such hearing upon the written application of pro-
ducers supplying a substantial proportion of the milk consumed in said
market ; and shall call such hearing upon the written application of dis-
tributors distributing a substantial proportion of the milk consumed in
such market. Such hearing may be held at such time and place and
after such notice as the commission may determine.

The commission shall withdraw the exercise of its powers from any
market upon written application of a majority of the producers (meas-
ured by volume) of milk produced and a majority of the distributors
(measured by volume of milk distributed) in said market acting jointly.

(j) The commission, after public hearing and investigation, may
fix the prices to be paid producers and/or associations of producers by
distributors in any market or markets, may fix the minimum and maxt-
mum wholesale and retail prices to be charged for milk in any market,
and may also fix different prices for different grades of milk. In de-
termining the reasonableness of prices to be paid or charged in any
market or markets for any grade, quantity, or class of milk, the commis-
sion shall be guided by the cost of production and distribution, including
compliance with all sanitary regulations in force in such market or
markets, necessary operation, processing, storage and delivery charges,
the prices of other foods, and the welfare of the general public.

(k) The commission may require all distributors in any market
designated by the commission to be licensed by the commission for the
purpose of carrying out the provisions of this act. The commission may
decline to grant a license, or may suspend or revoke a license already
granted upon due notice and after a hearing. The commission may
classify licenses, and may issue licenses to distributors to process or
store or sell milk to a particular city or village or to a particular market
or markets within the Commonwealth.

(1) Any member of the commission, or employee designated for the
purpose, shall have access to, and may enter at all reasonable hours, all
places where milk is stored, bottled or manufactured into food prod-
ucts. Any member of this board, or designated employee shall have
the power to inspect books and records in any place within the Com-
monwealth for the purpose of ascertaining facts to enable the board
to administer this act, and all such information shall be confidential,
unless the parties concerned agree to its being given out. The commis-
sion may combine such information for any market or markets and
make it public.

(m) The commission may define what shall constitute a natural
market area and define and fix the limits of the milkshed or territorial
area within which milk shall be produced to supply any such market area ;
provided, that producers, producer-distributors, or their successors now
shipping milk to any market may continue so to do until they voluntarily
discontinue shipping to the designated milk market.

(n) The commission may delegate such of the powers given it by
this act as it sees fit to the milk board in any particular market area,
for the purpose of carrying out the provisions of this act within said
market area. :

(o) Each licensee shall, from time to time, as required by the com-
mission, furnish to the commission verified reports containing such in-
formation as the commission may require.

Section 4. No distributor in a market in which the provisions of this
act are in effect shall buy milk from producers, or others, for sale
within the Commonwealth, or sell or distribute milk within the Com-
monwealth, unless such distributor is duly licensed under the provisions
of this act. It shall be unlawful for a distributor to buy milk from
or sell milk to a distributor who is not licensed as required by this act.
It shall be unlawful for any distributor to deal in, or handle milk if
such distributor has reason to believe it has previously been dealt
in, or handled, in violation of the terms and provisions of this act.

Section 5. An application to the commission for a license to operate
as a distributor shall be made by mail or otherwise within five days
after the provisions of this act become effective in a market, and as to
any. distributor thereafter beginning business, before such distributor
shall begin such business therein. The application shall be made on
blanks furnished by the commission for the purpose.
Section 6. Any order of the commission in refusing to issue a li-
cense, or suspending or revoking a license, may be reviewed on appeal
to the Supreme Court of Appeals.

Section 7. The licenses required by this act shall be in addition to
any other licenses required by existing laws of the Commonwealth of
Virginia or by any municipal ordinance. Nothing in this act shall be
construed to conflict with or repeal any laws now in force in the Com-
monwealth of Virginia relating to any board of health or sanitary code
now in force in this Commonwealth or in any municipality thereof, nor
any municipal ordinances relating to the inspection, grading, produc-
tion, sale or distribution of milk.

Section 8. Any person failing or refusing to comply with any sub-
poena issued by the commission or pursuant to its authority, shall be
deemed guilty of a misdemeanor, and upon conviction, may be punished
by a fine not exceeding one hundred dollars or by imprisonment not
exceeding ninety days, or both, and each day during which such viola-
tion shall continue shall be deemed a separate offense. In the event any
person shall fail to comply with any rule, regulation or order of the
commission, or obey any subpoena issued thereby, or in the event of
the refusal of any witness to testify to any matter concerning which
he lawfully may be interrogated by the commission or its representative,
it shall be the duty of the hustings court of the city of Richmond, or
judge thereof, upon application of the commission, to compel obedience
by attachment proceedings for contempt as in the case of disobedience
of the requirements of a subpoena issued from said court, refusal to
testify therein, or disobedience of an order or decree of such court.
The proceedings herein authorized in the hustings court to compel
obedience shall be in addition to the provisions of this section defining
what shall constitute a misdemeanor and providing and prescribing
the punishment therefor.

Section 9. The Milk Commission shall prepare an annual budget and
shall collect the sums of money required for this budget from the local
milk boards in the form of monthly assessments, and the local milk
boards shall pay the assessments so levied. The assessments so levied
shall not exceed two cents per hundred pounds of milk handled in each
market in which the provisions of this act are in operation.

Section 10. All receipts from assessments paid under this act shall
be paid by the commission to the State Treasurer and shall be placed
by the State Treasurer in the general fund to the credit of an account
to be known as the “Milk Commission account” and such amount as
may be necessary, and no more, hereby is appropriated out of such
Milk Commission account for the payment of all expenses incurred
by the Milk Commission in administering and enforcing this act.

Section 11. Local milk boards.—(a) Members. For the purpose
of securing the benefits of this act, in any market area, the producers and
distributors and producer-distributors in that market area shall estab-
lish a milk board of five members to carry out the provisions of this
act in conjunction with the State Milk Commission. Each local milk

board shall be composed of two representatives of the producers sup-
plying milk to the market, one of whom shall be named by the pro-
ducers’ co-operative marketing association operating in the market,
and in markets where the producers’ co-operative marketing associa-
tion handles the selling of fifty per centum or more of the milk, the
association shall have the right to name both representatives of the
producers on the milk board ; and two representatives of the distributors
operating in the market. In markets where producer-distributors handle
fifty per cent or more of the milk used in the market the Milk Commis-
sion shall determine the representation of the producers, the producer-
distributors and distributors on the milk board on a basis fair to all
parties.

The Milk Commission shall appoint the fifth member of the milk
board to represent the consumers and the public interest, who shall
serve as chairman of the board. The representative of the consumers
and the public interest shall have no connection financially or otherwise
with the production or distribution of milk or products derived there-
from.

(b) Expenses. The expenses of the milk board, including salaries
and/or the per diem of such personnel as the board finds it necessary
to employ to properly carry out its functions under this act, and in-
cluding the assessments levied by the State Milk Market Commission,
shall be met by an assessment of not over two cents per hundred pounds
of milk and/or cream (converted to terms of milk of four per cent
butterfat) handled by distributors and not over two cents per hundred
pounds of milk and/or cream (converted to terms of milk of four per
cent butterfat) sold by producers. The exact amount of each monthly
or semi-monthly assessment shall be determined by the milk board as
necessary to cover its expenses. All assessments shall be paid at the
time the distributors pay the producers for the milk. All officers and
employees of the milk board who handle funds of the board, or who
sign or countersign checks upon such funds, shall severally give bond in
such amount and with such sureties as shall be determined by the milk
board. The cost of such bonds shall be paid by the milk board.and the
milk board shall determine the amount and sufficiency of such bonds.

(c) Powers. The milk board shall perform such functions as the
Milk Commission shall delegate to it.

Section 12. In the event of violation of any provision of this act.
in addition to any other remedy, the commission may apply to any
court of record in the city of Richmond for relief by injunction, 1
necessary, to protect the public interest, without being compelled tc
allege or prove that any adequate remedy at law does not exist.

Section 13. Penalties——Any person violating any provision of this
act or of any license issued by the commission shall be guilty of a
misdemeanor and may be prosecuted and punished therefor, and, upor
conviction, shall be punished by a fine of not less than twenty-five dol-
lars nor more than one hundred dollars, or by imprisonment in the
county jail for not less than thirty days nor more than one year, o1
by both fine and imprisonment, and each day during which such viola:
tion shall continue shall be deemed a separate violation. Prosecution:
for violating the provisions of this act shall be instituted by the Com:
monwealth’s attorney of the Commonwealth, or otherwise, in any
county or city of the Commonwealth of Virginia in which the provision:
of this act are in effect.

Section 14. Saving clause——No provision of this act shall apply o1
be construed to apply to foreign or interstate commerce, except in sc
far as the same may be effective pursuant to the United States Consti-
tution and to the laws of the United States enacted pursuant thereto.

Section 15. Conflicting laws——The making of marketing agreement:
between producers’ co-operative marketing associations and distributors
and producer-distributors under the provisions of this act shall not be
deemed a combination in restraint of trade or an illegal monopoly ; or
an attempt to lessen competition or fix prices arbitrarily nor shall the
marketing contract or agreements between the association and _ the
distributors and producer-distributors, or any agreements authorized in
this act, be considered illegal or in restraint of trade. All laws or parts
of laws in conflict with the provisions of this act are hereby repealed
to the extent necessary for the full operation of this act.

Section 16. Constitutionality—If any section, clause, or sentence
or paragraph shall be declared unconstitutional for any reason, the re-
mainder of the act shall not be affected thereby.

Section 17. Termination——The period of public emergency during
which this act shall be effective shall be until such date as the Legis-
lature may, by joint resolution, designate to be the termination thereof,
or if the Legislature be not in session the date so designated by a
proclamation of the Governor.

2. An emergency existing, this act shall be in force from its passage.