Although most NY statutory liens are under the NY Lien law, the New York State Commissioner of Agriculture and Markets has a lien interest under Section 25-b of NY Agriculture and Markets Law against licensed milk dealers. This interest arises from the Commissioners role in administering the Milk Producers Security Fund. Milk dealers may, however, provide an alternate form of security (such as a letter of credit) in lieu of paying into the Milk Producer’s Security Fund.
The Commissioner has the same power under a similar program under Article 20 of the Agriculture and Markets Law, wherein wholesale dealers who do more than $10,000 annual business with New York state producers must either to both deposit a bond into the agricultural producers security fund and also deposit a fee (based upon annual volume of purchases), or provide a bond or letter of credit. N.Y. Agric & Mkts. §§ 248, 250-B. In both programs, the purpose of the fund is to provide prompt payment to producers.
Under the Milk Producers Security Fund Program, the Commissioner must certify the amount of the debt, and the defaulting dealer both an opportunity to request a hearing from the Commissioner prior to determination of the debt, plus another 30 days to bring a proceeding under CPLR Article 78 (an action against an administrative agency) to stay and review the Commissioner’s final determination.
After service by first class mail upon the defaulting dealer of the commissioner’s certification of payment of a claim from the fund for which the dealer has been found liable “the commissioner may issue a warrant under seal of the department directed to the sheriff of any county of the state commanding him or her to levy upon and sell the real and personal property of the defaulting” dealer. The commissioner may then file a copy of the warrant with the county clerk to perfect a lien, retroactive to the date of the earliest default, against the real and personal property and chattels real of the defaulting dealer. See N.Y. Agric & Mkts. § 258-B -5.
Similarly, under the Agricultural Producers Security Fund Program, an agriculture producer is paid from the fund if the dealer fails to do so. The defaulting dealer then has 15 days to reimburse the fund, otherwise “the commissioner may issue a warrant under seal of the department directed to the sheriff of any county of the state commanding him or her to levy upon and sell the real and personal property of the defaulting” dealer. The commissioner may then file a copy of the warrant with the county clerk to perfect a lien, retroactive to the date of the earliest default, against the real and personal property and chattels real of the defaulting dealer. N.Y. Agric & Mkts. § 250-B (2).