An Act to Encourage the Future of Maine's Dairy Industry LR2824(02)
Maine Legislature, Session 121, LD 1945
Committee Amendment CA_A_H883 (House)
Amends: 7 MRSA §2953

Act 
COMMITTEE AMENDMENT ·A" 
To Encourage the Future of 
to H.P. 1445, L.D. 1945, Bi1l, "An 
Maine's Dairy Industry" 
Amend the bi1l by striking out everything after the title 
and before the summary and inserting in its place the following: 
'Emergency preamble. Whereas, Acts of the Legislature do not 
become effective until 90 days after adjournment unless enacted 
as emergencies; and 
Whereas, volatility 
of 
prices 
paid 
to 
milk 
producers 
jeopardizes the viability of the Maine dairy industry; and 
Whereas, the 
Maine 
dairy 
industry 
State's rural economy and communities 
activity and preserves open space; and 
is 
and 
essential 
generates 
to 
the 
business 
Whereas, the stabilization of the dairy 
temporary 
price drops 
constitutes 
a 
public 
appropriate expenditure of state revenues; and 
industry during 
purpose 
and 
an 
Whereas, in the judgment of the Legislature, these facts 
create an emergency within the meaning of the Constitution of 
Maine 
and 
require 
the 
following 
legislation 
as 
immediately 
necessary for the preservation of the public peace, health and 
safety; now, therefore, 
Be it enacted by the People of the State of Maine as follows: 
Sec. 1. 7 MRSA §2953, 2nd" as repealed and replaced by PL 
1975, c. 517, §2, is amended to read: 
Page l-LR2824(2} 
COMMITTEE AMENDMENT 
.;f.; 
... .'.' 
COMMITTEE AMENDMENT ·ft" to H.P. 1445, L.D. 1945 
Not less than once every 3 years, 
the 
commission shall 
conduct independent studies of the economics and practices of the 
milk industry in order to assist the commission in establishing 
m~n~mum prices. 
The studies must include the compilation of cost 
data for farms at 3 different levels of production. 
Sec. 2. 7 MRSA §§3153-B and 3153-C are enacted to read: 
§3l53-B. Dairy stabilization 
1. 
Definitions. 
As 
used 
in this section, 
unless 
the 
context 
otherwise 
indicates, 
the 
following 
terms 
have 
the 
following meanings. 
A. 
"Annual production" means 
the total guantity of milk 
produced in a 12-month period beginning June 1st and ending 
May 
31st of the next calendar year. 
Total guantity is 
expressed in hundredweight. 
B. 
"Base price" means the price of milk calculated each 
month in accordance with subsection 2. 
C. 
"Suffolk 
County 
price" 
means 
the 
Suffolk 
County, 
Massachusetts 
statistical 
uniform 
price 
of 
milk 
as 
determined 
for 
each 
month 
by 
the 
Northeast 
Market 
Administrator of the United States Department of Agriculture 
and expressed per hundredweight of milk. 
D. 
"Target price" means the short-run break-even point for 
each of 3 categories of annual production. Target prices are 
determined in accordance with subsection 3. 
2. 
Calculation of base price. 
Base price is calculated 
each month by adding to the Suffolk County price; 
A. 
The amount per hundredweight paid to milk producers in 
the State as monthly premiyms established by the Maine Milk 
Commission under section 2954, subsection 1; and 
B. 
The amount per hundredweight received by milk producers 
as a monthly payment from the Federal Government due to low 
milk prices. 
Cost-of-production adjustments established under section 2954, 
subsection 2, paragraph A are not considered premiums for the 
purpose of calculating base price. 
3. 
Determination 
of 
target 
prices. 
The 
Maine 
Milk 
Commission 
shall 
est-ablish 
tiers 
of 
production, 
each 
COMMITTEE AMENDMENT 
" ' 
'~~~I' 
'.' .. 
~" 
COMMITTEE AMENDMENT "If" to H.P. 1445, L.D. 1945 
representing a range of annual production. 
The commission shall 
use the most recent studies conducted in accordance with section 
2953 to estimate the short-run break-even point within each tier. 
4. 
Distribution of dairy stabilization support. Beginning 
July It 2004 for each month that the base price is below the 
target price, the administrator of the Maine Milk Pool shall 
distribute to each milk producer in the State an amount of money 
equal 
to 
the 
preyiQus 
month's 
production 
in 
hundredweight 
multiplieg by the gifference between the applicable target price 
and the base price in the previous month. 
§3153-C. 
Milk Income Loss Contract 
1. 
Milk IncOme Loss Contract. 
For months in which payments 
Me made unger toe federal Milk Income Loss Contract authorized 
by Section 1502 of the federal Farm Security and Rural Inyestment 
Act of 2002, the administrator of the Maine Milk Pool shall make 
payments 
to those milk producers in the State whose 
annual 
proguction exceeds toe cap under the federal Milk Income Loss 
Contract. 
The 
administrator shall distribute 
an 
amount per 
oundredweight equal to the federal Milk 
Income Loss Contract 
payment for that monto for production in excess of the federal 
limit until that producer's annual proguction reaches 5,000,000 
pounds. 
No 
payment 
is 
mage 
unger 
this 
section 
for 
annual 
proguction in excess of 5,000,000 pounds. 
For purposes of this 
section', "annual production" has the same meaning as in section 
3153-B, subsection 1, paragraph A. 
Sec. 3. Target prices. 
Notwithstanding 
the 
Maine 
Revised 
Statutes, Title 7, section 3153-B, subsection 3, for the fiscal 
year beginning July 1, 2004 and until the Maine Milk Commission 
updates the Maine producer cost-of-production data and calculates 
new target prices, the target prices for Maine milk producers are 
as follows: 
1. 
For the first 16,790 hundredweight produced per year by 
each producer, the target price is $16.18 per hundredweight; 
2. 
For production between 16,790 hundredweight and 26,050 
hundredweight 
per 
year, 
the 
target 
price 
is 
$15.59 
per 
hundredweight; and 
3. 
For production in excess of 26,050 hundredweight per 
year, the target price is $13.12 per hundredweight. 
Sec. 4. Ad hoc committee. 
The Department of Agr icul ture« Food 
and 
Rural 
Resources 
shall 
develop 
a 
course 
of 
action 
for 
implementing the recommendations of the Governor's Task Force on 
the Sustainability of the Dairy Industry in Maine as presented in 
COMMITTEE AMENDMENT 
.' 
:,~;. 
COMMITTEE AMENDMENT .. 11-;, to H.P. 1445, L.D. 1945 
the final report and recommendations of that task force dated 
November 18, 
2003. 
The commissioner shall assemble an ad hoc 
committee 
of 
industry representatives 
to 
make 
specific task 
assignments, establish benchmarks and issue a progress report to 
the Governor each year no later than October 15th beginning in 
2004, with a final report and analysis due in 2007. The Governor 
shall consider the findings of the report in making funding 
recommendations to support the dairy industry. 
Sec. 5. Use of previously transferred funds. 
Notwithstanding any 
other provision of 
law, 
funds 
allocated to 
the 
Maine 
Milk 
Commission by Public Law 2003, chapter 120 for distribution to 
Maine 
dairy 
farmers 
in 
accordance 
with 
the 
Maine 
Revised 
Statutes, Title 7, 
section 3l53-A 
remain in the Maine 
Milk 
Commission's Milk Pool account. 
The administrator of the Maine 
Milk 
Pool 
may 
use 
these 
and 
other 
unexpended 
funds 
for 
distribution to Maine milk producers in accordance with Title 7, 
sections 3153-B and 3153-C. 
Sec. 6. Review by legislative committee; dairy stabilization. 
The 
joint standing committee of the Legislature having jurisdiction 
over agricultural matters shall review the tiered price support 
established under the Maine Revised Statutes, Title 7, section 
3l53-B and present its recommendations regarding that section to 
the Legislature no later than March 1, 2007. 
The joint standing 
committee 
of 
the 
Legislature 
having 
jurisdiction 
over 
agricultural matters may report out a bill to the First Regular 
Session of the 123rd Legislature to implement the committee's 
recommendations. 
Sec. 7. 
Review by legislative committee; Milk Income Loss 
Contract. 
The joint standing committee of the Legislature having 
jurisdiction over agricultural matters shall review the Maine 
Revised 
Statutes, 
Title 
7, 
section 
3l53-C 
and 
make 
recommendations 
regarding that section to the Legislature no 
later than March 1, 2007. The joint standing committee of the 
Legislature having jurisdiction over agricultural matters may 
report out a bill to the First Regular Session of the 123rd 
Legislature to implement the committee's recommendations. 
Sec. 
8. 
Appropriations 
and 
allocations. 
appropriations and allocations are made. 
AGRICULTURE, FOOD AND RURAL RESOURCES, 
DEPAR"l"MEHT OF 
Maine Milk Pool 
The 
following 
Initiative: Provides funds to carry out the provisions of the 
Maine Revised Statutes, Title 7, sections 3153-B and 3153-C. 
COMMITTEE AMENDMENT 
COMMITTEE AMENDMENT ,A .. to H.P. 1445, L.D. 1945 
Other Special Revenue Funds 
Al1 Other 
Other Special Revenue Funds Total 
2003-04 
$0 
$0 
2004-05 
$1,000,000 
$1,000,000 
Emergency clause. 
In view of the emergency cited in the 
preamble, this Act takes effect when approved.' 
SUMMARY 
This 
amendment 
replaces 
the bill to clarify prov1s1ons 
establishing 2 programs to support the prices paid to dairy 
farmers for their milk. It removes the repeal provisions in the 
bill and instead authorizes the joint standing committee of the 
Legislature having 
jurisdiction over agricultural matters 
to 
report out a bill to implement the committee's recommendations 
regarding each program after its review of each program. 
The 
bills are authorized for submission to the First Regular Session 
of the 123rd Legislature. 
The amendment allows funds previously allocated to the Maine 
Milk 
Commission 
for 
distribution 
to 
dairy 
farmers 
to 
be 
distributed under the new programs in fiscal year 2004-05. 
FISCAL NOTE REQUIRED 
(See attached) 
COMMITTEE AMENDMENT 
Appropriations! Allocations 
Other Special Revenue Funds 
Fiscal Detail and Notes 
Approved: 04/08/04 ~ae 
I2lst Maine Legislature 
Office of Fiscal and Program Review 
LD 1945 
An Act to Encourage the Future of Maine's Dairy Industry 
LR2824(02) 
Fiscal Note for Bill as Amended by Committee Amendment" " 
Committee: Agriculture, Conservation and Forestry 
Fiscal Note Required: Yes 
Fiscal Note 
2003-04 
2004-05 
Projections 
2005-06 
Projections 
2006-07 
$0 
$1,000,000 
$0 
$0 
The bill includes an Other Special Revenue Funds allocation 0[$1,000,000 in fiscal year 2004-05 for the Maine Milk 
Commission within the Department of Agriculture, Food and Rural Resources for the costs of implementing certain 
dairy support programs. The commission has adequate dedicated revenues to cover the increased allocation. 
LR2824(2) - Fiscal Note - Page 1 of 1