CHAPTER 648
H.P. 1445 - L.D. 1945
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 is essential to the State's rural economy and communities and generates business activity and preserves open space; and
Whereas, the stabilization of the dairy industry during temporary price drops constitutes a public purpose and an appropriate expenditure of state revenues; 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Sec. 1. 7 MRSA §2953, 2nd ¶, as repealed and replaced by PL 1975, c. 517, §2, is amended to read:
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 minimum 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:
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 quantity of milk produced in a 12-month period beginning June 1st and ending May 31st of the next calendar year. Total quantity 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 premiums 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 establish 3 tiers of production, each 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 1, 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 previous month's production in hundredweight multiplied by the difference 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 are made under the federal Milk Income Loss Contract authorized by Section 1502 of the federal Farm Security and Rural Investment Act of 2002, the administrator of the Maine Milk Pool shall make payments to those milk producers in the State whose annual production exceeds the cap under the federal Milk Income Loss Contract. The administrator shall distribute an amount per hundredweight equal to the federal Milk Income Loss Contract payment for that month for production in excess of the federal limit until that producer's annual production reaches 5,000,000 pounds. No payment is made under this section for annual production 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 Agriculture, 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 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 3153-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 estab-lished under the Maine Revised Statutes, Title 7, section 3153-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 3153-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. The following appropriations and allocations are made.
AGRICULTURE, FOOD AND RURAL RESOURCES,
DEPARTMENT OF
Maine Milk Pool
Initiative: Provides funds to carry out the provisions of the Maine Revised Statutes, Title 7, sections 3153-B and 3153-C.
Other Special Revenue Funds 2003-04 2004-05
All Other $0 $1,000,000
__________ __________
Other Special Revenue
Funds Total $0 $1,000,000
Emergency clause. In view of the emergency cited in the preamble, this Act takes effect when approved.
Effective April 16, 2004.
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