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House of Representatives
Session of 2023 - 2024 Regular Session

MEMORANDUM

Posted:	January 4, 2023 11:40 AM
From:	Representative John A. Lawrence and Rep. Clint Owlett
To:	All House members
Subject:	COSPONSORSHIP MEMO - Helping Pennsylvania's Struggling Dairy Farmers - Three Bill Package

Dear Colleagues – In the near future, we will reintroduce three initiatives designed to help Pennsylvania’s struggling dairy farmers. Taken together, these efforts are a comprehensive response to the challenges facing our dairy farmers. We would welcome your cosponsorship on these proposals.  Last session, these initiatives enjoyed the support of the Pennsylvania Farm Bureau, the Pennsylvania Milk Marketing Board, and a number of agricultural and dairy-focused organizations across the Commonwealth. SUMMARY #1 – Keystone Opportunity Dairy Zones – This legislation, similar to the Keystone Opportunity Zone program, would provide tax incentives to locate new dairy processing plants in Pennsylvania, encouraging markets for Pennsylvania milk.  This bill passed the House last session 198-0 but was not considered in the Senate.   #2 – Whole Milk in Pennsylvania Schools Act – This legislation would ensure Pennsylvania school children have access to Pennsylvania-produced whole milk.  This bill passed the House last session 196-2 but was not considered in the Senate.   #3 – Transparency and Accountability on Milk Marketing Board Over-Order Milk Premiums – This legislation gives the MMB the ability to coordinate the collection and distribution of MMB milk premiums to ensure these consumer-paid premiums actually get to Pennsylvania Dairy Farmers.  Last session, this bill passed the House 196-0 but did not receive final consideration in the Senate. Your support of these initiatives would be greatly appreciated.

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Document #1

Description:

DETAILS   #1 – Keystone Opportunity Dairy Zones (Providing Tax Incentives for New Dairy Processing Facilities)   Based on the long standing Keystone Opportunity Zone (KOZ) program, this initiative would designate several “Keystone Opportunity Dairy Zones” or “KODZ”s across the Commonwealth to encourage new or additional processing capacity for Pennsylvania milk.  Increasingly, people are drinking less milk while eating more yogurt, cheese, butter, ice cream, etc.  Attracting milk processing plants to Pennsylvania provides new and increased markets for Pennsylvania milk, and converts our milk into value-added products that can be shipped around the country – even around the world.  The bill is structured to provide tax credit opportunities for both larger processers and small on-farm operations.   Qualifying processing facilities would be required to create new jobs and utilize primarily Pennsylvania milk in exchange for tax incentives similar to those offered under the KOZ program.  These new processing facilities would create significant increased demand and provide new markets for dairy farmers in the Commonwealth.  Smaller, on-farm operations such as on-farm ice cream stands, glass-bottle home delivery operations, and small cheesemakers would also have the opportunity to apply for tax credits.

Document #2

Description:

#2 – Whole Milk in Pennsylvania Schools Act Most of us grew up getting whole or chocolate milk during our elementary school years.  We remember our Kindergarten days when chocolate milk was sold in the Elementary Cafeteria – 25 cents a carton for Rep. Owlett, 15 cents a carton for Rep. Lawrence.     These days, due to federal regulations enacted under the Obama Administration, whole and two percent reduced fat milk is not served in schools.  Speak with any school cafeteria worker, and they will tell you students are not fans of skim milk.  Speak with any dairy farmer in Pennsylvania, and they will tell you that this ill-fated federal directive removing whole milk from schools is a top concern.     A study cited by the Pennsylvania Milk Marketing Board in a Lancaster Farming article noted that elementary student milk consumption dropped 35% when flavored milk was eliminated from school offerings, and much of the (skim) milk provided to school children these days is tossed in the trash.  Students receive zero percent of the nutrients contained in a carton of milk that ends up in the dumpster.  The article, entitled “Too Much School Milk Wasted,” can be viewed at this link: https://www.lancasterfarming.com/news/main_edition/too-much-school-milk-wasted/article_412c3a46-2db5-11ec-afac-f392de4c8563.html   Pennsylvania has a centuries-old tradition of family dairy farms.  Milk that is produced, processed, and sold completely within the Commonwealth is a matter of intrastate, not interstate, commerce.  Schools within Pennsylvania, using Pennsylvania funds, should not be denied the ability to purchase a Pennsylvania agricultural product to serve to Pennsylvania school children.   This proposal is on firm legal footing, as detailed by Rep. Lawrence in his floor remarks on this legislation last session.  For those interested in the court cases and legal precedents that provide the legal basis for this legislation, these floor remarks can be viewed at the following link: www.legis.state.pa.us/WU01/LI/HJ/2022/0/20220413.pdf#page=17   This legislation will ensure Pennsylvania students, at Pennsylvania schools, have the option to consume Pennsylvania whole and two percent reduced fat milk paid for with Pennsylvania tax dollars.  This bill saw enthusiastic support from the Pennsylvania Farm Bureau last session. pfb.com/pennsylvania-farm-bureau-members-advocate-for-whole-milk-in-schools/

Document #3

Description:

#3 - Transparency and Accountability on Milk Marketing Board Over-Order Milk Premiums   Existing law and regulations permit the Pennsylvania Milk Marketing Board (MMB) to establish premiums on milk sold in Pennsylvania.  For over thirty years, the MMB’s Over-Order Premium (OOP) has been built into the state-minimum price for milk, with the intent that the funds collected through the premium would benefit Pennsylvania Dairy Farmers.  In plain English, the idea is that consumers pay a little more for milk with the understanding that the extra money supports Pennsylvania farmers.    Many farmers question how many, if any, of these OOP dollars actually come back to the Pennsylvania Dairy Farmer.  Currently, the MMB has no infrastructure to directly collect and distribute the milk premiums.  This legislation would clarify the MMB’s roles and responsibilities as it relates to MMB milk premiums, and give the MMB the ability, but not the requirement, to coordinate the collection and distribution of milk premiums.  This proposal would significantly increase accountability and transparency on how this state-mandated money is collected and paid, and more importantly, would ensure that the funds actually get to dairy farmers.