THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY BRUBAKER, SEPTEMBER 24, 2010

REFERRED TO AGRICULTURE AND RURAL AFFAIRS, SEPTEMBER 24, 2010  

AN ACT

Amending the act of April 28, 1937 (P.L.417, No.105), entitled,

as amended, "An act relating to milk and the products

thereof; creating a Milk Marketing Board; establishing its

jurisdiction, powers and duties; regulating the production,

transportation, manufacturing, processing, storage,

distribution, delivery and sale of milk and certain products

thereof; providing for the licensing of milk dealers and the

payment of fees therefor; requiring milk dealers to file

bonds to secure payment for milk to producers and certain

milk dealers; authorizing the holding of hearings and the

issuance of subpoenas by the board; conferring jurisdiction

upon courts to punish contempts and to prohibit violations of

this act and of rules, regulations and orders of the board;

authorizing the board to adopt rules, regulations and orders,

and to enter into interstate and Federal compacts; requiring

persons who weigh, measure, sample or test milk to procure

permits or certificates, to take examinations, to pay fees

therefor, to furnish certain notices, records and statements,

and to use certain methods of weighing, measuring, sampling

and testing; authorizing the board to examine the business,

papers and premises of milk dealers and producers, requiring

the keeping of records and the filing of reports by milk

dealers, and permitting, with limitations, the use of

information obtained thereby; authorizing the board to fix

prices for milk and certain milk products subject to the

approval of the Governor, and conferring certain powers upon

the Governor with respect thereto; providing for appeals to

the courts from decisions of the board, and for the burden of

proof upon such appeals; prescribing penalties, fines and

imprisonment for violations of this act and rules,

regulations and orders of the board; defining perjury;

defining remedies; repealing legislation supplied and

superseded by this act, and saving rights, duties and

proceedings thereunder; and making appropriations," further

providing for definitions, for appointment and terms of

members and quorum, for requisites of orders fixing price of

milk and for prices to producers; providing for title to

milk; further providing for price increases, for expenses and

for payment; establishing the Producer Settlement Fund; and

repealing provisions relating to the Joint Study Commission.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  The definitions of "board," "milk components" and

"milk dealer" or "handler" in section 103 of the act of April

28, 1937 (P.L.417, No.105), known as the Milk Marketing Law,

amended December 21, 1984 (P.L.1278, No.243), are amended and

the section is amended by adding a definition to read:

Section 103.  Definitions; Construction.--The following terms

shall be construed in this act to have the following meanings,

except in those instances where the context clearly indicates

otherwise:

* * *

"Board" means the State agency created by this act, to be

known as the "Milk [Marketing] Control Board."

* * *

"Milk components" means the components of milk, including

butterfat and any other components, for which the prices of

handlers, producers or both are established by marketing

agreements or orders issued under the Agricultural Marketing

Agreement Act of 1937 (7 U.S.C. 601, et seq.) and which the Milk

[Marketing] Control Board determines by regulation are

applicable to the marketing areas established under this act.

"Milk dealer" or "handler" means any person, including any

store or subdealer or subhandler, who purchases or receives or

handles on consignment or otherwise milk within the

Commonwealth, for sale, shipment, storage, processing or

manufacture [and further sale], within or without the

Commonwealth, whether on behalf of himself or others, or both. A

producer who delivers milk to a milk dealer or handler only

shall not be deemed a milk dealer or handler. If a cooperative

distributes or makes available on consignment or otherwise milk

within this Commonwealth to stores, as defined in this act, or

to consumers, as defined in this act, or to other milk dealers

or handlers, as defined in this act, or acts as an agent for its

members, it shall be deemed to be a milk dealer or handler as to

that part of its business, and shall be governed by the

provisions of this act applicable thereto. Such cooperative

shall be governed by the applicable provisions of this act as to

the prices at which it sells, markets, or bargains to sell or

make available on consignment or otherwise milk within this

Commonwealth to milk dealers, handlers and others.

* * *

"Qualified producer" means a Pennsylvania producer whose milk

is purchased or processed as fluid or manufactured products.

Notwithstanding any other provision of this act to the contrary,

the term does not include a cooperative.

* * *

Section 2.  Sections 201, 801 and 803 of the act, amended

December 21, 1984 (P.L.1278, No.243), are amended to read:

Section 201.  Appointment and Terms of Members; Quorum.--

There is hereby created an independent administrative board to

be known as the Milk [Marketing] Control Board. The board shall

consist of [three] five members, three of whom shall be 

nominated and appointed by the Governor, by and with the advice

and consent of [two-thirds] a majority of all the members of the

Senate, and two of whom shall be appointed, one each by the

President pro tempore of the Senate and the Speaker of the House

of Representatives. Members of the board shall serve for terms

of [six (6)] four (4) years each, and until their successors

shall have been appointed and qualified[; except that the terms

of the members first taking office shall expire May first, one

thousand nine hundred thirty-nine, May first, one thousand nine

hundred forty-one, and May first, one thousand nine hundred

forty-three, respectively, as designated by the Governor at the

time of appointment and until their successors shall have been

appointed and qualified]. Of the members appointed [after the

effective date of this amending act] by the Governor, one shall

be appointed to represent consumer interests and shall have the

responsibility under the direction of the board for directing

the executive secretary to coordinate and supervise the Bureau

of Consumer Affairs. A least three members of the board shall be

current or former Pennsylvania producers.

The Governor shall designate one of the members of the board

as chairman. The chairman shall, when present, preside at all

meetings and price hearings, and in his absence a member

designated by the chairman shall preside. When presiding at a

price hearing, the chairman or acting chairman shall have the

status of agency head for the purpose of conducting the hearing.

[Two] Three members of the board shall constitute a quorum,

and any action or order of the board shall require the approval

of at least [two] three members.

The Governor may remove any board member for inefficiency,

neglect of duty, loss of qualification as provided in section

202 or misconduct in office: Provided, That he is given a copy

of the charges against him and an opportunity to be publicly

heard in person or by counsel in his own defense upon not less

than ten days' notice, and that the Governor file with the

Department of State a complete statement of all charges made

against such board member, together with a complete record of

the proceedings and his findings thereon.

Section 801.  Requisites of Orders Fixing Price of Milk.--The

board shall ascertain, after a hearing in which all interested

persons shall be given reasonable opportunity to be heard, the

logical and reasonable milk marketing areas within the

Commonwealth, shall describe the territorial extent thereof,

shall designate such areas by name or number, and shall

ascertain and maintain such prices paid to producers, to dealers

and to stores for milk in the respective milk marketing areas as

will be most beneficial to the public interest, best protect the

milk industry of the Commonwealth and insure a sufficient

quantity of pure and wholesome milk to inhabitants of the

Commonwealth, having special regard to the health and welfare of

children residing therein.

The board shall base all prices upon all conditions affecting

the milk industry in each milk marketing area, including the

amount necessary to yield a reasonable return to the producer,

which return shall not be less than the cost of production and a

reasonable profit to the producer, of the quantity of milk

necessary to supply the consumer demand for fluid milk plus a

reasonable reserve supply as determined by the board, and a

reasonable return on aggregate milk sales by milk dealers or

handlers and stores selling milk. A reasonable return shall mean

not less than a two and one-half percent (2 1/2%) nor more than

a three and one-half percent (3 1/2%) rate of return based on

net sales of price-controlled products determined in accordance

with generally accepted accounting principles. [However, where

the board determines that the market for Pennsylvania produced

milk is threatened it may establish producer prices designed to

market the milk.] In ascertaining such returns, the board shall

utilize available information concerning producers' cost of

production and a cross-section representative of producers,

dealers and stores in the area and shall consider unit costs of

various types of products and of various sizes of containers.

The board shall file at its office, with each order issued, a

general statement in writing of the findings of fact in support

of, and the reasons for such order.

The board may, upon its own motion or upon application in

writing, from time to time, alter, revise or amend an official

order defining milk marketing areas or fixing prices to be

charged or paid for milk. Before making, revising or amending

any order defining milk marketing areas or fixing prices to be

charged or paid for milk, the board shall hold a hearing, after

giving reasonable opportunity to be heard to interested persons,

of whom the board has notice, and, in the case of any order

affecting the public, after giving reasonable notice thereof to

the public in such newspaper or newspapers as, in the judgment

of the board, shall afford sufficient notice and publicity:

Provided, however, That after such hearing, there shall be a

further hearing or conference before the board on any proposed

order, and notice of such further hearing or conference shall be

given to the parties represented and heard at the previous

hearing. Upon application in writing from a person aggrieved by

an order of the board hereunder, filed within fifteen (15) days

after the issuance of the order complained of, or upon its own

motion, the board may, within twenty (20) days after the

effective date of such order, issue an order revising or

amending such order without a further hearing, if such revision

or amendment is based on the record of the hearing held prior to

the issuance of such order.

"Interested persons," as used in this section, means all

persons who may be affected by an order of the board fixing

prices, and who have signified to the board in writing their

desire to be notified of such hearings concerning a particular

milk market area or areas within the Commonwealth. "Reasonable

opportunity to be heard" may be afforded by written notice

addressed to the last known address of an interested party by

mail, postage prepaid, by deposit in a United States post office

or any receptacle thereof. Nothing contained in this section

shall be construed to limit or modify the provisions of section

three hundred eight of this act relating to the posting and

publicizing of orders of the board, including orders made under

this article and the force and effect thereof.

At any hearing provided for herein the testimony of an expert

statistician present at the hearing and any printed,

typewritten, duplicated, mimeographed or other written treatise,

report or statistical data by an expert not present as a

witness, if and to the extent it is endorsed as reliable to an

expert witness present at the hearing, shall be competent

evidence on any subject material to fixing any price under this

article. However, the testimony, treatise, report or data must

result from a study of facts and conditions in the milk

marketing area which is the subject of the hearing.

All provisions of all price-fixing orders of the board shall

be presumed to be valid, and the burden of proving any

invalidity of any provisions thereof shall be upon the person

asserting the same. Any determination by the board, or a court

to which an appeal has been taken, that the wholesale or retail

prices provided are invalid shall not prevent the enforcement of

prices to producers, but any determination that prices to

producers are unreasonable shall require the redetermination by

the board of wholesale and retail prices as well as prices to

producers.

Whenever an order of the board fixing prices is remitted to

the board with directions to reform the findings or order in

accordance with the opinion of the court, and no further appeal

is taken by the board, the board shall make such reformation

within thirty days from the entry of the order of the court

remitting the price-fixing order to the board.

Section 803.  Prices to Producers.--(a)  The board shall fix,

by official order, the minimum prices or a formula for the

setting of minimum prices to be paid by milk dealers or handlers

to producers for milk or milk components sold or delivered or

made available on consignment or otherwise by producers to

dealers or handlers: Provided, however, That the fixing of

prices to be paid by milk dealers or handlers to producers for

milk or milk components to be used solely in manufacturing shall

be discretionary with the board.

(b)  Prices to producers fixed by the board under this

section in excess of the Federal order price shall be paid by

milk dealers or handlers into the Producer Settlement Fund.

Section 3.  The act is amended by adding a section to read:

Section 803.1.  Title to milk.--(a)  The scope of this

section is as follows:

(1)  This section shall apply only to the administration of

this act.

(2)  This section shall not supersede an order of a Federal

administrative agency or of the board which requires the cost of

shipment of milk to be free on board the place of destination.

(b)  Notwithstanding 13 Pa.C.S. § 2401(2)(ii) (relating to

passing of title; reservation for security; limited application

of section), title to milk shall be transferred from the

producer to the milk dealer at the point of shipment of the

milk.

Section 4.  Section 805 of the act, amended July 31, 1968

(P.L.963, No.294), is amended to read:

Section 805.  Price Increases.--It is hereby declared to be

the legislative intent that the benefits of any increase of

prices received by milk dealers, by virtue of the minimum price

provisions of this article, shall be given to producers[, except

in any case where the board deems a deviation from this policy

necessary in order lawfully to maintain proper milk markets and

outlets for producers and consumers]. The board shall, whenever

it deems such action necessary, issue orders, rules or

regulations to effectuate this intent.

Section 5.  Sections 1102 and 1104 of the act, amended

December 20, 1991 (P.L.404, No.48), are amended to read:

Section 1102.  Expenses.--(a)  As much of the money in the

Milk Marketing Fund as may be necessary shall be annually

appropriated to the Milk [Marketing] Control Board to be used to

pay its expenses, including the following:

(1)  Salaries of the board and of its employes.

(2)  Rental and other expenses for offices, rooms, garage

space and other accommodations outside of the Capitol Buildings,

either in or outside of the capital city, occupied by the board.

(3)  Premiums for workmen's compensation insurance covering

the officers and employes of the board.

(4)  Premiums for surety bonds for such officers or employes

of the board as may be required by law to furnish such bonds.

(5)  Purchase and operating costs of motor vehicles required

by the board for full-time use, including premiums for liability

insurance covering such motor vehicles and the members of the

board and employes operating them; also the amount payable to

the Department of General Services for the use of automobiles

supplied by it for temporary use by the board.

(6)  Furniture, stationery, materials, supplies and all other

overhead expenses of the board.

(7)  All other expenses of every kind and description

necessary for the performance by the board of its work.

(b)  All such purchases and leases shall be made, and all

such contracts of insurance and surety bonds shall be placed,

through the Department of General Services as agent.

(c)  Before November 1 of each year, the [Milk Marketing

Board] board shall estimate its total expenses for the fiscal

year beginning July 1 of the following year. This estimate shall

be submitted to the Governor in accordance with section 610 of

the act of April 9, 1929 (P.L.177, No.175), known as "The

Administrative Code of 1929." At the same time the board submits

its estimate to the Governor, the board shall also submit that

estimate to the General Assembly through the President pro

tempore of the Senate and the Speaker of the House of

Representatives. The board, or its designated representatives,

shall be afforded an opportunity to appear before the Governor

regarding its estimate.

Section 1104. Payment.--Moneys in the Milk Marketing Fund

appropriated to the Milk [Marketing] Control Board shall be paid

out upon warrant of the State Treasurer drawn after requisition

by the secretary of the Milk [Marketing] Control Board.

Section 6.  The act is amended by adding a section to read:

Section 1104.1.  Producer Settlement Fund.--The Producer

Settlement Fund is hereby established in the State Treasury as a

restricted account. The fund shall consist of moneys deposited

in accordance with section 803(b). All moneys in the fund and

the interest accruing thereon are hereby appropriated to the

Milk Control Board on a continuing basis to carry out the

provisions of this section. The board may use up to two percent

(2%) of the fund for administration. Moneys in the fund shall be

distributed by the board on a pro rata basis to qualified

producers based on the volume of milk produced and shipped by

each qualified producer.

Section 7.  Section 1204 of the act, added December 21, 1984

(P.L.1278, No.243), is repealed:

[Section 1204.  Joint Study Committee.--There is hereby

created a Joint Study Committee which shall study the

implementation and effect of resale pricing under this act. The

committee shall be in existence until its report hereunder is

delivered to the General Assembly not later than December 31,

1985. The committee shall consist of the following members:

(1)  Four producers, one each appointed by the majority

leader and minority leader of each house.

(2)  Four consumers, one each appointed by the majority and

minority leaders of each house.

(3)  Four dealers, one each appointed by the majority and

minority leaders of each house.

(4)  The chairman and the minority chairman of the

Agriculture and Rural Affairs Committees of each house, or their

designee.

(5)  One at-large member appointed by the Secretary of

Agriculture.

At the first meeting of the committee which will be called by

the chairman of the Senate Agriculture and Rural Affairs

Committee, the committee shall elect a chairman who, with the

concurrence of a majority of the members of the committee, shall

determine a schedule of meetings for the conduct of committee

business. The chairman thus elected, or another member of the

committee as appointed by the chairman, shall preside at all

meetings of the committee.

There is also hereby created an advisory committee to provide

assistance and support for the Joint Study Committee and which

shall consist of:

(1)  The chairman of the Pennsylvania Milk Marketing Board

and his staff.

(2)  The Dean of the Pennsylvania State University College of

Agriculture and his staff.

(3)  The Dean of the Wharton School of Business

Administration of the University of Pennsylvania and his staff.

The purpose of the committee shall be to study and report

upon the implementation and effect of the resale milk pricing

provisions of this act. The committee shall submit its final

report to the Agriculture and Rural Affairs Committee of each

house not later than December 1, 1985.]

Section 8.  This act shall take effect in 60 days.