§ 20-59-602 - Escrow accounts.
20-59-602. Escrow accounts.
(a) (1) Pursuant to the provisions of this section, a dairy farmer from whom milk was purchased by a milk processor may require the milk processor to establish an escrow account for the benefit of the dairy farmer for the payment of the purchase price of milk as specified in subdivision (a)(2) of this section.
(2) A dairy farmer may require the milk processor to establish an escrow account only if:
(A) The dairy farmer has failed to receive payment of the purchase price for the milk, and the dairy farmer has given written notice by registered mail, return receipt requested, to the milk processor by the end of the thirtieth day after the final date for payment of the purchase price that such payment has not been received; or
(B) A payment instrument received by the dairy farmer from the milk processor has been dishonored, and the dairy farmer has given written notice by registered mail, return receipt requested, to the milk processor by the end of the fifteenth business day after the day that the notice of dishonor was received.
(3) The notice specified by subdivision (a)(2) of this subsection shall require that an escrow account be established and that the payment received from the sale of any milk or dairy product as specified in subsection (b) of this section shall be deposited in the escrow account until the dairy farmer has received full payment of the purchase price for the milk.
(b) (1) The milk processor shall deposit upon receipt into the escrow account a proportional share of all payments received from the sale of milk or dairy products by the milk processor, which is equal to the amount of the milk sold by the dairy farmer to the processor in proportion to the total amount of milk purchased, for the sale of the milk and dairy products by the milk processor. The payments shall be deposited in the escrow account until the dairy farmer has received full payment for the purchase price for the milk.
(2) The escrow account shall be a segregated interest-bearing account and shall be established for the benefit of the dairy farmer. Upon sufficient proof of identification, the escrow account agent shall promptly pay to the dairy farmer any sum accumulated for his or her benefit in the escrow account.
(c) (1) If any milk processor is required to establish more than one (1) escrow account by operation of the provisions of this section, then the moneys accruing may all be commingled in a single account.
(2) The commingled moneys accumulated in the account shall be distributed to each dairy farmer in the amount due to each.
(3) If the commingled moneys accumulated in the account are insufficient to pay all the dairy farmers, the escrow account agent shall distribute the moneys so accumulated in proportion to the current amount due each.
(d) For the purposes of this section, the moneys held by the escrow account agent shall be deemed to be the property of the dairy farmer, or dairy farmers if such moneys have been commingled, in the current amount due to each, or in proportion to the amount due each.