An ActTo Implement the Recommendations ofthe Task Force Oil the Sustainability of the Dairy Industry in Maine (EryIERGENCY) .
Maine Legislature, Session 124, LD 1758
Amends: 7 MRSA §3153-B, 7 MRSA §3153

Legislative Document 
No. 1758 
H.P. 1252 
House of Representatives, January 28,2010 
An ActTo Implement the Recommendations ofthe Task Force Oil 
the Sustainability of the Dairy Industry in Maine 
(EryIERGENCY) . 
Reported by Representative PIEH of Bremen for the Joint Standing Committee on 
Agriculture, Conservation and Forestry pursuant to Public Law 2009, chapter 213, Part TTT, 
section 9. 
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Printed on recycled pilper 
'71J~ 1J1. 77!tl£~{ 
MiLLICENT M. MacFARLAND 
Clerk 
Emergency preamble. Whereas,. acts and resolves of the Legislature do not 
become effective until 90 days after adjouniment uniess enacted as emergencies; and 
Whereas, milk producers are receiving milk payments that are below the cost of 
production; and 
Whereas, all sectors of the dairy industry and rural economies are in jeopardy; and 
Whereas, it is in the State's economic interest to maintain a viable dairy industry 
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and in the public interest to have a secure food supply; 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 ofthe State of Maine as follows: 
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Sec. 1. 7 MRS A §2952-A, sub-§3, ~A, as enacted by PL 2005, c. 382,Pt. F, §4, 
is amended to read: 
A. 
Not less than once every 3 years, conduct independent studies of the economics. 
and practices of the milk industry in order to assist the commission in establishing 
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minimum prices. The studies must include the compilation of cost data for farms at;; 
. 1. different levels of production; and 
Sec. 2.' 7 MRSA §3153-B, sub-§l, ~, as enacted by PL 2003, c. 648, §2,is . 
amended to read: 
D. 
"Target price" means' the short-run break-even point for each of;; 1. categories of 
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annual production. Target prices are determined in accordance with subsection 3. 
Sec. 3. 7 MRSA §3153-B, sub-§3, as amended by PL 2007, c. 240, Pt. 000, § 1 
and c. 262, § 1, is further amended to read: . 
3. Determination of target prices. The Maine Milk Commission shall establish;; 1. 
tiers of production, each 'representing a range of annual production. The commission 
shall use the most recent studies conducted in accordance with section 2952-A, 
subsectioll 3, paragraph A to estimate the short-run break-even point within each tier. 
The Maine Milk Commission may establish and amend ranges of production for each tier 
and target prices through rulemaking. 
Rules adopted pursuant to this subsection are 
major substantive rules as defined in Title 5, chapter 375, subchapter 2-A.· ' 
Sec. 4. 7 MRSA §3153"-C, as amended by PL 2005, c. 230, §l, is repealed. 
Sec. 5. 7 MRS A §3153-D, as enacted by PL 2005, c. 418, § 1, is amended to read: 
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§3153-D .. Transfer of revenues 
On or before the +itfl18th day of each month, the administrator of the Maine Milk 
Pool shall certifY the amounts to be distributed for the previous month pursuant to 
sections section 3153-B and 3153 C to the State Controller, who shall transfer the 
certified monthly amount when certified from General Fund undedicated revenue to the 
. Maine Milk Pool Other Special Revenue Funds account. 
Sec. 6. PL 2007, c. 240, Pt. 000., §2 is repealed. 
Sec. 7. PL 2007, c. 262, §2 is repealed. 
Sec. 8. PL 2009, c. 213, Pt. TTT, §2 is amended to read: 
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Sec. TTT -2. Cap on transfers for th~ dairy stabilization program in fiscal 
years 2009-10 and 2010-11. Notwithstanding the Maine Revised Statutes, Title 7, 
section 3153-D, in fiscal years 2009-10 and 2010-11, the administrator of the Maine Milk 
Pqol may not certifY any amount to be transferred from the General Fund for distributions 
under Title 7, section 3153-B that would bring the total amount transferred in fiscal years 
2009-(0 and 2010-11 above $13,349,600 $17,361,291. 
Notwithstanding Title 7, section 3153-B, in fiscal years 2009-10 and 2010-11, the 
administrator of the Maine Milk Pool may not distribute payments for dairy stabilization 
support that in the aggregate exceed $13,349,600 $17,361,291. 
Sec. 9. Interim target prices. Beginning July 1,2010 and until the Maine Milk 
C;ommission updates the Maine producercost-of-production data and adopts new tiers of 
production and target prices in accordance with the Maine Revised Statutes, Title 7, 
section 3153-B, subsection 3, the production levels for each tier and the target prices for 
milk producers in tlie" State are asfollo'ws: . 
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1. For the first 16,790 hundredweight produced per year by each producer, the target 
price is $20.70 per hundredweight; 
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2. For production from 16,791 hundredweight to 49,079 hundredweight per year, the 
target price is.$18.07 per hundredweight; 
3. For production from 49,080 hundredweight to 76,803 hundredweight per year, the 
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target price is $17.29 per. hundredweight; and 
4. For production in excess· ~f 76,803 hundred'w~ight per year, the target price is 
$16.51 per hundredweight. 
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Sec. 10. Administrator authorized to make monthly adju.stments during 
the period from Ju.ly 1, 2010 to June 30, 2011. During the period from July 1, 
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2010 to. June 30, 20 ll, the administrator of the Maine MiII~ Pool shall monitor milk price 
projections and each month calculate the amounts to be paid out under the dairy 
stabilization program for fiscal year 2010-i 1 . based on these projections: The 
administrator may adjust the amount requested and the amount distributed in any month 
during this period based on the most recent projections and calculations. The 
administrator may reduce payments only if projections indicate that the total distributions 
under the stabilization program will ~xceed $17,361,291 in the biennium consisting of 
fiscal years 2009-10 and 2010-11. 
If projections indicate that total distributions will exceed $17,361,291, the 
administrator shaH adjust pay~ents distributed in October 2010 to June 2011 on milk 
produced in the months of September 2010 to May 2011 by multiplying the target price 
for each tier by the same percent. The administrator shall adjust payments distributed in 
July, August and September 2010 on milk produced in June, July arid August 2010, 
respectively, in accordance with sections 1 i and 12. 
Sec. 11. 
Calculation of payments for milk produced June 1, 2010 to-
August 31, 2010. No~ithstanding the'Maine Revised Statutes, Title 7, s.ection 3153-B, 
the administrator of the Maine Milk Pool shall calculate and make payments to Maine 
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milk producers in accordance with this section for milk produced from June 1,2010 to 
August 31, 2010. 
I. No later than June 15,2010, the administrator of the Maine Milk Pool shall assign 
each producer to one of 4 tiers based on that producer's total production during the 12-. 
month period beginning June 1, 2009 and ending May 31, 2010. 
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2. Upon -receiving the production data for June 2010, the administrator shall: 
A. Calculate the amount of money due each producer in accordance with Title 7, 
section 3153-B, subsection 4; 
B. Reduce each producer's payment by a percentage established in.section 12; and 
C. Certify to the State Controller the amounts to be transferred and distributed. 
3. The administrator shall calculate payments for milk produced in July 2010 and 
milk produced in August £010 in the manner prescribed in subsection 2, paragraphs A, B 
and C. 
Sec. 12. Reductions in payments for milk produced in June, July and 
August 2010. The administrator of the Maine Milk Pool shall determine the percentage 
reduction in payments required under section 11, subsection 2, paragraph B in a manner 
that results in: 
.. Each producer within a tier receiving the same percentage reduction in payment 
for a month as other producers in that tierrecei've forthat month; and· 
2. Percentage reductions betweem adjacent tiers in a' r:atio, of 1 to 2, progressing from 
tier 1 to tier 4. 
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Sec. 13. 
Calculation and distribution of dairy stabilization payments 
begimling July 1, 2011. Beginning July 1,2011 and until further legislative action is 
. taken, the administrator ofthe Maine Milk Pool shaH calculate and distribute payments in 
accordance with the Maine Revised Statutes, Title 7, section 3153-B using the prodUction 
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levels and target prices established in section 9: The administrator may not use authority 
under section 10 or 11 to reduce payments after June'30, 2011. 
Sec. 14. 
Improvements to cost-of-production study. 
The Maine Milk 
Commission shall develop a method for comprehensive data collection t6 improve the 
'reliability and verification of the cost-of-production studies used to determine target 
prices under the Maine Revised Statutes, Title 7, section 3153-B, subsection 3. With 
improved information, the commission shall establish tiers that are more representative of 
Maine dairy farms and target prices that more closely approx,imate the short-run break-
even point for each tier. 
Sec. 15. Report to joint standing committee. No later than January 15,2011, 
the Maine Milk Commission shall report to the joint 'standing, committee of the 
Legislature' having jurisdiction over agriculture matters on the improved data collection 
method developed, under section 14. . The report must contain a timetable for 
implementing the method and for revising the tiers of production and target prices in 
accordance with the Maine Revised Statutes, Title 7, section 3153-B, subsection 3. 
Sec. 16. 
Legislation authorized. 
The 
joint standing committee of the 
Legislature having jurisdiction over agriculture matters may submit legisl~tion to the 
125th Legislature to revise,the tiers and target prices used to calculate dairy stabilizatiqn 
payments to Maine milk producers under the Maine Revised Statutes, Titie 7, section 
3153-B. 
Sec. 17. Appropriations and allocations. The following appropriations and 
allocations are made. 
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AGRICUL TURE"FOOD AND RURAL RESOURCES, DEPARTMENT OF 
Milk Commission 0188 
Initiative:, Provides allocation to the Maine Milk Pool for fiscal year 2010-11 based on 'an 
increase in the cap on the milk subsidy t6 $17,361,291 for fiscal year 2010-11. 
OTHER SPECIAL REVENUE FUNDS 
All Other 
OTHER SPECIAL REVENUE FUNDS TOTAL 
2009-10 
$0 
$0 
2010-11 
$4,0·11,691 
$4;011,691 
Emergency clause. 
In view, of the emergency cited In the preamble, this 
legislation takes effect when approved. 
SUMMARY 
This bill amends current law to require the Maine Milk Commission to establish 4 
tiers of production within the dairy stabilization program rather than 3. It also clarifies 
that the commission may revise production levels for each tier as well ,as target prices 
through major substantive rulemaking. 
It repeals provisions related to the federal Milk Income Loss Contract. Public Law 
2009, chapter 213, Part TIT, section 6 suspends payments under the Maine milk income 
loss contract in fiscal years 2009-1 o and 2010-11. 
It repeals the 2 sectiol1s of unaIlocated law passed in 2007 that established identical 
. production levels and target prices for the tier program. 
It raises the cap on transfers from the dairy stabilization program in fiscal years 2009-
10and2010-11 to $17,361,291. 
It establishes the production levels and target prices for each of the 4 tiers to be in 
effect until the next cost-of-production study and adoption through rulemaking of the tiers 
and prices are completed. 
It authorizes the administrator of the Maine Milk Pool to make monthly adjustments 
in payments as needed in fiscal year 2010-11. 
It establishes the method for calCulating payments for milk produced from June 1, 
2010ioAugust31,2010. 
It specifies that reductions in payments received in July, August and September of 
2010 ~m milk produced in June, July and August of 2010 are to be established at a 1:2 
ratio between adjacent tiers. 
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It clarifies that the reduction authorized in this 'bill for fiscal year 2010-11 does not 
continue after June 30, 2011. Without further legislative action, the administrator of the 
Maine Milk Pool may not reduce payments distributed in July 2011 and thereafter for 
milk produced in June 2011 and thereafter. 
It requires the Maine Milk Commission to improve data collection for the cost-of-
production study and report its results to the joint stand ing comm ittee of the Legislature 
having jurisdiction over agriculture mattersby January 15, 2011. 
It authorizes the joint standing committee of the Legislature having jurisdiction over 
agriculture matters tosubmit legislation to the 125th Legislature, 
FISCAL NOTE REQUIRED 
(See attached) 
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Approved: 01/27110_ ~aC! 
LD r7 'S g 
LR 2522(01) 
An Act To Implement the Recommendations of the ~ask Force on the Sustainability of the Dairy 
Industry 
Fiscal Note for Original BiU 
. Committee: Agriculture, Conservation and Forestry 
Fiscal Note Required: Yes 
Fiscal Note 
2009-10 
2010-11 
. Projections 
2011-12 
Projections 
2012-13 
Net Cost (Savings) 
General Fund 
$0 
$4,011,691 
$0 
$0 
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'ppropriations/ Allocations 
Other Special Revenue Funds 
$0 
$4,011,691 
$0 
$0 
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Revenue 
General Fund 
Other Special Revenue Funds 
Fiscal Detail and Notes 
$0 
$0 
($4,011,691) 
$4,011,691 
$0 
$0 
$0 
$0 
This legislation increases the cap on distributions made through the Dairy Stabilization Program and the Maine Milk 
Income Loss Contract in fiscal year 2010-11 to $17,361,291. This increase would result. in a reduction in General 
Fund revenue in fiscal year 2010-11 of $4,011,691 and a corresponding increase in Other Special Revenue Funds 
revenue. The bill al~o includes an Other-Special Revenue Funds allocation in fiscal year 2010-11 of $4,011 ,691 to the 
bepartment of Agriculture, Food and Rural Resources, Milk Commission. 
The legislation also directs the Maine Milk. Commission to revise the tiers of production and target prices and report 
back to the Joint Standing Committee oli AgricultUre, Conservation and Forestry by January 15, 2011. It is expected 
that the.se revisions will result in revised estimates of distributions for fiscal year 2011.;.12 and beyond. 
LR2522(01) - Fiscal Note - Page 1 of 1