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House of Representatives
Session of 2021 - 2022 Regular Session


Posted: January 26, 2021 10:41 AM
From: Representative John A. Lawrence
To: All House members
Subject: COSPONSOR MEMOS - Helping Pennsylvania's Struggling Dairy Farmers - Package of Two Bills
Dear Colleagues –

In the near future, I will reintroduce two initiatives designed to help Pennsylvania’s struggling dairy farmers. Taken together, these efforts are a comprehensive response to the challenges facing our dairy farmers. I 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.

#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 a market for Pennsylvania milk.  This bill passed the House last session 194-2 but was not considered in the Senate.

#2 – Milk Marketing Board and Department of Revenue coordination on milk premiums – This legislation gives the MMB the ability to coordinate the collection and distribution of MMB milk premiums with the Department of Revenue, ensuring these consumer-paid premiums get to struggling Pennsylvania Dairy Farmers.  Last session, this bill passed the House 196-0, and the Senate Agriculture Committee 11-0, but did not receive final consideration in the Senate.

Document #1

Introduced as HB223

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

Introduced as HB224

Description: #2 - Milk Marketing Board and Department of Revenue coordination on 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 with the Department of Revenue, which has an existing infrastructure in place.  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.      
Your support of these initiatives would be greatly appreciated.