An Act To Reinstate a Milk Handling Fee
Maine Legislature, Session 121, LD 0345
Committee: Taxation
Sponsors: MILLS
Amends: 7 MRSA §2954

Legislative Document 
No. 345 
H.P.274 
House of Representatives, January 30, 2003 
An Act To Reinstate a Milk Handling Fee 
(EMERGENCY) 
Reference to the Committee on Taxation suggested and ordered printed. 
Presented by Representative MILLS of Cornville. 
!r/~/J7.7J2~ 
MILLICENT M. MacFARLAND 
Clerk 
Under suspension of the rules, cosponsored by Senator WESTON of Waldo and 
Representatives: BERRY of Belmont, BIERMAN of Sorrento, BRUNO of Raymond, CARR 
of Lincoln, CHURCHILL of Orland, CLARK of Millinocket, CLOUGH of Scarborough, 
CRESSEY of Baldwin, DAVIS of Falmouth, DUPREY of Medway, FLETCHER of Winslow, 
GOODWIN of Pembroke, GREELEY of Levant, HEIDRICH of Oxford, HOTHAM of 
Dixfield, JACKSON of Fort Kent, JENNINGS of Leeds, JODREY of Bethel, KAELIN of 
Winterport, KOFFMAN of Bar Harbor, LEDWIN of Holden, McKEE of Wayne, McNEIL of 
Rockland, MOORE of Standish, NUTTING of Oakland, PIOTTI of Unity, SA VIELLO of 
Wilton, SHERMAN of Hodgdon, SIMPSON of Auburn, SMITH of Monmouth, SUSLOVIC 
of Portland, TARDY of Newport, TRAHAN of Waldoboro, USHER of Westbrook, WOTTON 
of Littleton, Senators: CATHCART of Penobscot, DAMON of Hancock, HALL of Lincoln, 
KNEELAND of Aroostook, MITCHELL of Penobscot, TREAT of Kennebec. 
Printed on recycled paper 
Emergency preamble. Whereas. Acts of the Legislature do not 
become effective until 90 days after adjournment unless enacted 
as emergencies; and 
Whereas, the State is facing significant budget deficits in 
fiscal years 2003 and 2004; and 
Whereas, 
the 
milk 
handling 
tax 
substantial revenue to the General Fund 
January of 1995 until its repeal on August 
previously 
provided 
from its adoption in 
1, 1996; and 
Whereas, the 
State 
and 
its 
citizens 
are 
experiencing 
economic difficulties and significant fiscal problems; and 
Whereas, additional revenues are needed for the State to 
address such difficulties and problems; and 
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 §2954, sub-§I. as amended by PL 1999, c. 679, 
Pt. B, §3 and affected by §14, is further amended to read: 
1. 
Conwnission 
empowered 
to 
establish 
prices; 
public 
hearing. 
The commission is vested with the power to establish 
and change, after investigation and public hearing, the minimum 
wholesale and retail prices to be paid to producers, dealers and 
stores 
for 
milk 
received, 
purchased, 
stored, 
manufactured, 
processed, distributed or otherwise handled within the State. 
The 
commission 
shall 
hold 
a 
public 
hearing 
prior 
to 
the 
establishing or changing of such minimum prices. The commission 
may proceed, however, under the emergency rule-making provisions 
of Title 5, section 8054 without making findings of emergency 
when the only changes to be made in the minimum prices are to 
conform with the orders of any federal or other agency duly 
authorized by law to establish or negotiate producer prices 9F L 
are to respond to other conditions affecting prevailing Class I, 
Class II and Class III prices in southern New England or are to 
reflect the milk handling tax levied and imposed by Title 36, 
chapter 
720. 
Title 
5, 
section 
8054, 
subsection 
3, 
the 
2nd 
sentence, 
does not apply to minimum prices adopted under the 
previous sentence. 
Due notice of the public hearing must be 
given by publishing notice as provided in Title 5, chapter 375. 
The 
commission 
shall 
hold 
such 
a 
public 
hearing 
not 
less 
frequently than once every 12 months to determine whether the 
Page l-LR0836(1) 
;;.. 
minimum wholesale and retail prices then established should be 
changed. 
In 
addition 
to 
the 
data 
received 
through 
the 
implementation of the information gathering procedures of its 
rules as a basis for its determinations, the commission shall 
solicit 
and 
seek 
to 
receive 
oral 
and written 
testimony at 
hearings to determine whether the minimum wholesale and retail 
prices 
then 
established 
should 
be 
changed 
and 
whether 
the 
proposed 
m1n1mum 
wholesale 
and 
retail 
prices 
are 
just 
and 
reasonable. 
This subsection is repealed January 1, 2005. 
Sec. 2. 7 MRSA §2954, sub-§l-A is enacted to read: 
1-A. 
Commission 
empowered 
to 
estab1ish prices; 
Pub1ic 
hearing. 
The commission is vested with the power to establish 
and change, after investigation and public hearing, the minimum 
wholesale and retail prices to be paid to producers, dealers and 
stores 
for 
milk 
received, 
purchased, 
stored, 
manufactured, 
processed, distributed or otherwise handled within the State. 
The 
commission 
shall 
hold 
a 
public 
hearing 
prior 
to 
the 
establishing or changing of such minimum prices. The commission 
may proceed, however, under the emergency rule-making provisions 
of Title 5, section 8054 without making findings of emergency 
when the only changes to be made in the minimum prices are to 
conform with the orders of any federal or other agency duly 
authorized by law to establish or negotiate producer prices or 
are to respond to other conditions affecting prevailing Class I, 
Class II and Class III prices in southern New England. 
Title 5, 
section 8054, subsection 3, the 2nd sentence, does not apply to 
minimum prices adopted under the previous sentence. 
Due notice 
of the public hearing must be given by publishing notice as 
provided in Title 5, chapter 375. 
The commission shall hold such 
a public hearing not less frequently than once every 12 months to 
determine whether the minimum wholesale and retail prices then 
established should be changed. In addition to the data received 
through 
the 
implementation 
of 
the 
information 
gathering 
procedures of its rules as a basis for its determinations, the 
commission shall solicit and seek to receive oral and written 
testimony at hearings to determine whether the minimum wholesale 
and retail prices then established should be changed and whether 
the proposed minimum wholesale and retail prices are just and 
reasonable. 
This subsection takes effect January 1, 2005. 
Sec. 3. 7 MRSA §2954, sub-§2. -VB, as amended by PL 1995, c. 2, 
§2, is further amended to read: 
B. 
The minimum wholesale prices paid to dealers must be 
established to reflect the 
lowest prices at which milk 
purchased from producers in this State at minimum prices in 
the 
State 
can 
be 
received, 
processed, 
packaged 
and 
distributed within 
the 
State at 
a 
just 
and 
reasonable 
return, and in addition must include the amount of any tax 
aeseFffiiaea levied and imposed by Title 36, chapter +16 720. 
This paragraph is repealed January 1, 2005. 
Sec. 4. 7 MRSA §2954, sub-§2, ~B-l is enacted to read: 
B-l. 
The minimum wholesale prices paid to dealers must be 
established to reflect the 
lowest prices at which milk 
purchased from producers in this State at minimum prices in 
the 
State 
can 
be 
received, 
processed, 
packaged 
and 
distributed within 
the 
State at 
a 
just 
and 
reasonable 
return. 
This paragraph takes effect January 1, 2005. 
Sec. 5. 7 MRSA §2954, sub-§13, as amended by PL 1995, c. 2, 
§3, is further amended to read: 
13. 
Report 
to 
State 
Tax 
Assessor. 
The 
Maine 
Milk 
Commission shall report before the first of each month to the 
State Tax Assessor the basic price of milk established for that 
month as defined in Title 36, chapter +16 720. 
This subsection 
is repealed January 1, 2005. 
Sec. 6. 36 MRSA c. 720 is enacted to read: 
CHAPTER 720 
MILK HANDLING TAX 
§4901. 
Definitions 
As 
used in this 
chapter, 
unless 
the 
context 
otherwise 
indicates, the following terms have the following meanings. 
1. 
Handler. 
"Handler," 
with 
respect 
to 
a 
particular 
container of packaged milk, means the wholesale handler or, if 
none, the retail handler. 
2. 
Milk. 
"Milk" has the 
same meaning as 
in Title 
7, 
section 2951, subsection 6. 
3. 
Packaged milk. 
"Packaged milk" means milk that has been 
processed and placed in containers for ultimate sale to consumers. 
4. 
Person. 
"Person" 
means 
an 
individual, 
partnership, 
firm, corporation, association or other unit and the State and 
all political subdivisions or agencies of the State. 
5. 
Retail handler. 
"Retail handler" means 
a person who 
handles packaged milk in this State that is next sold in this 
State subject to the retail minimum prices established pursuant 
to Title 7, chapter 603. 
6. 
Tax period. 
"Tax period" means the period beginning on 
the Sunday closest to the first day of the month and continuing 
through the Saturday prior to the Sunday closest to the first day 
of the subseguent month. 
7. 
Wholesale handler. 
"Wholesale handler" means a person 
who handles packaged milk in this State that is next sold in this 
State subject to the minimum wholesale prices paid to dealers 
established pursuant to Title 7, chapter 603. 
§4902. 
Milk handling tax 
1. 
Tax. 
An excise tax is levied and imposed at the rate 
established in SUbsection 2 on the handling in this State of 
packaged milk for sale in this State. 
With respect to the 
handling in this State of a particular container of packaged milk 
for sale in this State, the tax must be paid by the handler. 
There is no tax on the handling in this State of packaged milk 
for sale in containers that are less than one guart or 20 or more 
guarts in volume, or packaged milk that is sold to an institution 
that is owned and operated by the State or Federal Government. 
2. 
Rate. 
The rate of the tax levied under this chapter 1S 
8¢ per guart. 
For a container other than a guart, the tax is computed on a 
guart-eguivalent basis. 
3. 
Tax calculation. 
Handlers shall pay the tax for each 
tax period on all milk subject to the tax sold during the tax 
period: 
A. 
Subject to the minimum wholesale prices paid to dealers 
established by the Maine Milk Commission pursuant to Title 
7, chapter 603; or 
B. 
Not subject to minimum wholesale prices paid to dealers 
but subject to minimum retail prices established by the 
Maine Milk Commission pursuant to Title 7, chapter 603. 
In calculating the amount of packaged milk handled for sale 1n 
this State each tax period, the handler shall deduct any packaged 
milk returned to the handler during that tax period. 
4. 
Taz; additional. 
A tax imposed and collected under this 
chapter is in addition to any other taxes imposed or collected 
under any other law of the State. 
5. 
Records. 
reports 
and 
administration. 
Every 
handler 
subject to the tax imposed under subsection 1 shall register with 
the assessor within 5 business days of becoming subject to the 
tax and annually thereafter on forms provided by the assessor. 
The list of registered handlers must be available to the public. 
By the 25th day of each calendar month, every handler subject to 
the tax imposed under subsection 1 shall report to the assessor 
for the guantity of packaged milk handled in this State for sale 
in this State during the preceding tax period, the guanti ty of 
packaged milk handled that was subject to the milk handling tax 
and any other information the assessor determines necessary or 
useful in the administration of this chapter and enforcement of 
the milk handling tax. 
6. 
Due dates. 
Handlers shall pay to the assessor the tax 
due for the preceding tax period not later than the 25th day of 
each calendar month and submit the information reguired by the 
assessor on the forms provided. 
7. 
Presumption. 
In a proceeding against a retail handler 
for collection of the tax with respect to a particular container 
of packaged milk, 
there is a rebuttable presumption that that 
retail handler did not purchase that container in a transaction 
subject 
to 
the 
m~n~mum 
wholesale 
prices 
paid 
to 
dealers 
established pursuant to Title 7, chapter 603. 
The burden is on 
the retail handler to show that the retail handler purchased that 
container of packaged milk in a transaction subject to minimum 
wholesale prices paid to dealers established pursuant to Title 7, 
chapter 603. 
8. 
General Fund. 
The assessor shall immediately pay all 
funds received from the milk handling tax to the Treasurer of 
State to be deposited in the General Fund. 
The funds may not be 
dedicated 
to 
a 
particular purpose 
and 
may 
be 
used 
for 
all 
purposes of State Government. 
§4903. 
Repeal 
This chapter is repealed January 1, 2005. 
Sec. 
7. 
Appropriations 
and 
allocations. 
appropriations and allocations are made. 
ADMINISTRATIVE AND FINANCIAL 
SERVICES, DEPARTMENT OF 
The 
following 
Bureau of Revenue Services 
Initiative: 
the 
Bureau 
handling tax. 
Provides funding to cover the initial costs of 
of 
Revenue 
Services 
to 
administer 
the 
milk 
General Fund 
All Other 
2002-03 
$10,000 
Emergency clause. 
In view of the emergency cited in the 
preamble, this Act takes effect when approved. 
SUMMARY 
This bill reinstitutes the milk handling tax, which was in 
effect in 1995 and 1996, at the rate of 8¢ per quart on all milk 
handled for retail sale in Maine. 
The tax is paid on a monthly 
basis by the wholesale handler or, if there is none, 
by the 
retail handler. 
Proceeds of the tax are paid to the State's 
General Fund for general purposes of State Government and are not 
dedicated to any particular purpose. 
The bill also repeals the 
tax on January 1, 2005.