2450 Milk marketing fees

Title 7--AGRICULTURE

MILK MARKETING BOARD

[7 PA. CODE CH. 150]

Milk Marketing Fees

[33 Pa.B. 6415]

   The Milk Marketing Board (Board) amends Chapter 150 (relating to milk marketing fees) to read as set forth in Annex A. The authority for this final-form rulemaking is section 3 of the Milk Marketing Fee Act (act) (31 P. S. § 700k-3).

   Notice of proposed rulemaking was published at 32 Pa.B. 3953 (August 10, 2002) with an invitation to submit written comments within 30 days. During the public comment period, the Board received comments from the Pennsylvania Association of Milk Dealers (PAMD) and from a milk hauler. The Senate Committee on Agriculture and Rural Affairs and the House Agriculture and Rural Affairs Committee offered no comments, suggestions or objections to the proposed rulemaking. The Independent Regulatory Review Commission (IRRC) did offer comments, which are discussed fully in this preamble.

   In final-form rulemaking, the Board considered the comments and suggestions of the PAMD, the milk hauler and IRRC.

Purpose

   The principal purpose of the final-form rulemaking is to adjust fees as necessary to reflect the administrative costs of issuing licenses, and to meet the Board's budget requirements. Article XI of the Milk Marketing Law (31 P. S. §§ 700j-1101--700j-1104) provides that all money collected by the Board from license fees and other sources shall be placed in a separate fund known as the Milk Marketing Fund (Fund), which is annually appropriated to the Board to pay its expenses. The Board is therefore self-supporting, receiving no revenues from the General Fund. Its chief source of revenue is license and certification fees. Monetary penalties paid by licensees in settlement of prosecution actions and miscellaneous income such as interest provide minor supplemental income. Of these sources, only license and certification fees are capable of meaningful adjustment to offset projected shortfalls. Under current funding, the Board projects steadily declining balances in the Fund. The Board is increasing fees at this time to cover projected deficits in the coming years.

   A secondary purpose of the final-form rulemaking is to achieve greater clarity and consistency in the regulations.

Comments

   Both the PAMD and IRRC objected to the size of the fee increases, and the hundredweight fees in particular. IRRC also questioned the need for the fee increase for the 2003-2004 fiscal year, when a deficit was not projected until the 2005-2006 fiscal year. The PAMD suggested that the increase should be phased in over time, and IRRC recommended that the hundredweight fee increase be reduced by at least 1/2 of the proposed increase.

   The fee increase is necessary at this time to cure projected deficits in the Fund in the ''out'' years. The size of the proposed increase was simply the result of the Board following its historical practices. Traditionally, fee increases have been sufficient to sustain the Board for 10 years or more. The last previous fee increase was effective for the 1992-1993 license year, 11 years ago. The proposed increase was projected to sustain the Board through the license year 2013-2014.

   However, in response to the comments from the PAMD and IRRC, the Board has decided to reduce the hundredweight fee increase by 1/2 of what was originally proposed, and to delay the increases for 1 year. The final-form rulemaking sets the hundredweight fee for milk for which the Board sets wholesale or retail prices at $.045, and for milk for which the board does not set these prices at $.0057. The hundredweight fee increases will take effect with the 2004-2005 license year (July 1, 2004--June 30, 2005); the increase in certification fees for milk weighers and samplers will take effect commencing with the 2004 certification year (January 1, 2004--December 31, 2004). These fees are projected to sustain the Board through the 2008-2009 license year.

   IRRC suggested that the final-form rulemaking should designate the name or number of the form required by each provision, where the forms can be obtained and whether the forms are available from the Board's website. This suggestion has been implemented in the final-form rulemaking.

   IRRC also suggested that the word ''substantially'' be removed from § 150.13(b) (relating to time for payment of fees). This change has been made in the final-form rulemaking.

   The only other comment received was from a milk hauler who suggested that the milk hauler license and the weigher/sampler certificate be renewed every 2 years rather than the current 1-year period. The annual renewal of the milk hauler license and the weigher/sampler certificate is a requirement of the Milk Marketing Law (31 P. S. §§ 700j-101--700j-1302) and cannot be changed by rulemaking. A letter to this effect was sent to the milk hauler who submitted this comment.

Additional Changes in the Final-Form Rulemaking from the Proposed Rulemaking

   Some additional changes have been made to the final-form rulemaking from the proposed rulemaking. These changes were made to improve consistency within and between sections, to clarify an ambiguity regarding the payment of monthly hundredweight fees by new applicants for milk dealer's licenses and to correct typographical errors which were found in the proposed rulemaking.

   Since the term ''fixed fee'' is the term now being used throughout Chapter 150 to describe the annual fee that all applicants pay upon application or renewal, that term has been used to replace ''annual fee'' or ''annual license renewal fee'' in the text whenever these fees are referred to, and wherever necessary to distinguish between the fixed fee and other types of fees. This applies to §§ 150.11--150.13, 150.21--150.23 and 150.51--150.53. Similarly, the term ''hundredweight fee'' has been added to the text of § 150.13, and ''quart-equivalent fee'' has been added to the text of §§ 150.22 and 150.23 (relating to quart-equivalent fees; and time for payment of fees) to distinguish between these fees and the fixed fee.

   In the proposed rulemaking, it was not clear that a new applicant for a milk dealer's license was subject to the monthly payment of the hundredweight fee. This was the result of the addition of § 150.11(b) (relating to fixed fees), which establishes a lower fee for an applicant for annual renewal of a milk dealer's license. Section 150.12(b) (relating to hundredweight fees), which imposes the monthly hundredweight fee payments on dealers who were not licensed for the entire preceding calendar year, was amended in the proposed rulemaking by the addition of the clause ''In addition to the annual license renewal fee imposed under § 150.11(b). . . .'' Taken together, the additions to these two sections would imply that the monthly hundredweight fee was applicable only to applicants for annual renewal under § 150.11(b), but not to new applicants under § 150.11(a). Adding further confusion, the language added to § 150.13(c), regarding time for payment of fees, provided that ''[a]n applicant for renewal of a milk dealer's license subject to the requirements of § 150.12(b) . . .'' would be required to pay the monthly hundredweight fee. As stated previously, the implication is that only applicants for renewal are subject to the requirements of § 150.12(b).

   To clarify this issue, the final-form rulemaking amends the first sentence of § 150.12(b) to read ''In addition to the fixed fee imposed under § 150.11 (relating to fixed fees), a milk dealer that was not licensed for the entire calendar year preceding license application or renewal shall pay a monthly hundredweight fee as set forth in paragraphs (1) and (2).'' Additionally, § 150.13(a) was amended to state that ''A new applicant for a milk dealer's license shall pay the fixed fee imposed under § 150.11(a) . . . and shall submit the monthly hundredweight fee imposed under § 150.12(b) . . . .'' Finally, § 150.13 was amended by the removal of the phrase ''subject to the requirements of § 150.12(b)'' from subsection (c), accompanied by the addition of language to subsections (b) and (c) that will still differentiate between applicants who were licensed for the entire preceding calendar year (who pay the annual hundredweight fee at time of application) and those who were not licensed for the entire preceding calendar (who pay the monthly hundredweight fee each month).

   The final-form rulemaking makes minor changes to § 150.12 to correct errors which appeared in the proposed rulemaking. In subsections (a)(2) and (b)(2) of the proposed rulemaking, the word ''produced'' was erroneously deleted from the text. This error has been corrected in the final-form rulemaking. In the same two paragraphs of the proposed rulemaking, the phrase ''that is not included under paragraph (1) and that the milk dealer'' appeared as an addition to the text. Upon further consideration, this phrase has been removed since it is redundant. Also, subsection (b)(1) and (2) of the proposed rulemaking both contained the phrase ''for which the license is issued.'' This phrase does not appear in these paragraphs in the existing regulations and was not intended to be included in the proposed rulemaking. Since it was mistakenly included in the proposed rulemaking, the final-form rulemaking has simply omitted this phrase.

Paperwork Estimates

   There will be no additional paperwork requirements for milk dealers, subdealers, milk haulers, milk testers or milk weighers and samplers.

Effective Date

   This rulemaking will become effective 30 days after final-form publication in the Pennsylvania Bulletin.

Sunset date

   There is no sunset date.

Regulatory Review

   Under section 5(a) of the Regulatory Review Act (71 P. S.§ 745.5(a)), the Board submitted a copy of the notice of proposed rulemaking, published at 32 Pa.B. 3953, to IRRC and to the Senate Committee on Agriculture and Rural Affairs and the House Agriculture and Rural Affairs Committee for review and comment.

   In compliance with section 5(c) of the Regulatory Review Act, the Board also provided IRRC and the Committees with copies of comments received by the Board relating to the proposed regulation and the Board's response to those comments.

   In preparing this final form rulemaking, the Board has considered the comments received from all commentators.

Contact Person

   The contact person is Lynda J. Bowman, Executive Secretary, Milk Marketing Board, 2301 North Cameron Street, Harrisburg, PA 17110-9408, [phone].

Findings

   The Board finds that:

   (1)  Public notice of the intention to adopt the final-form rulemaking was given under sections 201 and 202 of the act of July 31, 1968 (P. L. 769, No. 240) (45 P. S. §§ 1201 and 1202) and the regulations promulgated thereunder, 1 Pa. Code §§ 7.1 and 7.2.

   (2)  A public comment period was provided as required by law and all comments were considered.

   (3)  The final-form rulemaking is necessary and appropriate for the administration of the act.

Order

   The Board, acting under authorizing statute, orders that:

   (a) The regulations of the Board, 7 Pa. Code Chapter 150, are amended by amending §§ 150.1, 150.11--150.13, 150.21--150.23, 150.51--150.53, 150.61, 150.62, 150.71, 150.72 and 150.81; by adding § 150.2a; and by deleting §§ 150.41 and 150.42 to read as set forth in Annex A.

   (b) The Board will submit this order and Annex A to the Office of Attorney General for review and approval as to legality and form as required by law.

   (c) The Board shall certify this order and Annex A and deposit them with the Legislative Reference Bureau as required by law.

   (d) This order shall take effect January 26, 2004.

BEVERLY R. MINOR,   
Chairperson

   (Editor's Note:  For the text of the order of the Independent Regulatory Review Commission relating to this document, see 33 Pa.B. 2831 (June 14, 2003).)

   Fiscal Note:  Fiscal Note 47-10 remains valid for the final adoption of the subject regulations.

Annex A

TITLE 7.  AGRICULTURE

PART VI.  MILK MARKETING BOARD

CHAPTER 150.  MILK MARKETING FEES

GENERAL PROVISIONS

§ 150.1.  Definitions.

   When used in this chapter, terms defined in section 103 of the act (31 P. S. § 700j-103) have the meanings given to them in that section, unless the context clearly indicates otherwise.

§ 150.2a.  License year; certification year.

   (a) The license year for milk dealers, subdealers and milk haulers is the period beginning on July 1 of a given year and ending on June 30 of the succeeding year.

   (b)  The certification year for milk testers and milk weighers and samplers is a calendar year.

LICENSE FEES OF MILK DEALERS

§ 150.11.  Fixed fees.

   (a)  A new applicant for a milk dealer's license shall pay a fixed fee of $100 for a license issued on or after July 1 but before October 1 of the same year or a proportionate fixed fee as follows:

   (1)  $75 for a license issued on or after October 1 but before January 1 of the succeeding year.

   (2)  $50 for a license issued on or after January 1 but before April 1 of the same year.

   (3)  $25 for a license issued on or after April 1 but before July 1 of the same year.

   (b)  An applicant for annual renewal of a milk dealer's license shall pay a fixed fee of $50.

§ 150.12.  Hundredweight fees.

   (a)  In addition to the fixed fee imposed under § 150.11 (relating to fixed fees), a milk dealer that was licensed for the entire calendar year preceding license renewal shall pay an annual hundredweight fee as set forth in paragraphs (1) and (2).

   (1)  For milk for which the Board has fixed a minimum wholesale or retail price, received, produced or brought into this Commonwealth during the calendar year preceding the period for which the license is issued, the fee is $.045 per hundredweight.

   (2)  For milk for which the Board has not fixed a minimum wholesale or retail price, received, produced or brought into this Commonwealth during the calendar year preceding the period for which the license is issued, the fee is $.0057 per hundredweight.

   (b)  In addition to the fixed fee imposed under § 150.11, a milk dealer that was not licensed for the entire calendar year preceding license application or renewal shall pay a monthly hundredweight fee as set forth in paragraphs (1) and (2). Monthly payments shall continue until the milk dealer has been licensed for an entire calendar year and for each month thereafter until the next license year begins. Annual payments shall then commence under subsection (a).

   (1)  For milk for which the Board has fixed a minimum wholesale or retail price, received, produced or brought into this Commonwealth during the preceding month, the fee is $.045 per hundredweight.

   (2)  For milk for which the Board has not fixed a minimum wholesale or retail price, received, produced or brought into this Commonwealth during the preceding month, the fee is $.0057 per hundredweight.

   (c)  In computing hundredweight fees under subsections (a) and (b), the Board will ascertain and fix the fluid milk equivalent of milk other than fluid milk by dividing the pounds of butterfat in cream by 3.5 and the pounds of nonfat solids in condensed and concentrated milk by 8.8. For farm-separated sour cream used exclusively in making butter to be marketed or ultimately sold as such, the Board will compute the total quantity of milk based on pounds of butterfat or sour cream rather than on the fluid milk equivalent.

   (d) Milk that was purchased by a milk dealer located in or outside this Commonwealth from an out-of-State producer, and was diverted to an out-of-State milk dealer, is not subject to a hundredweight fee. As used in this subsection, ''diverted'' means that the purchasing milk dealer took possession of producer milk at the farm, from which location it was delivered to another milk dealer without entering the purchasing milk dealer's plant.

§ 150.13.  Time for payment of fees.

   (a)  A new applicant for a milk dealer's license shall pay the fixed fee imposed under § 150.11(a) (relating to fixed fees) when the applicant submits the milk dealer/subdealer license application (available from the Board Office or website), and shall submit the monthly hundredweight fee imposed under § 150.12(b) (relating to hundredweight fees) with the monthly report milk dealers must file under § 147.10 (relating to monthly reports).

   (b)  An applicant for renewal of a milk dealer's license that was licensed for the entire calendar year preceding license renewal shall pay the fixed fees imposed under § 150.11(b) and the annual hundredweight fee imposed under § 150.12(a) when the applicant submits the milk dealer/subdealer license renewal application (available from the Board Office or website). Fees exceeding $2,000 may be paid in four equal installments, the first to be submitted with the milk dealer/subdealer license renewal application and the remaining three to be received in the Board office on or before September 15, December 15 and March 15, respectively, or the next business day if the 15th falls on a day when Commonwealth offices are closed.

   (c)  An applicant for renewal of a milk dealer's license that was not licensed for the entire calendar year preceding license renewal shall pay the fixed fee imposed under § 150.11(b) when the applicant submits the milk dealer/subdealer license renewal application, and shall submit the monthly hundredweight fee imposed under § 150.12(b) with the monthly report milk dealers shall file under § 147.10.

LICENSE FEES OF SUBDEALERS

§ 150.21.  Fixed fees.

   (a)  A new applicant for a subdealer's license shall pay a fixed fee of $50 for a license issued on or after July 1 but before October 1 of the same year or a proportionate fixed fee as follows:

   (1)  $37.50 for a license issued on or after October 1 but before January 1 of the succeeding year.

   (2)  $25 for a license issued on or after January 1 but before April 1 of the same year.

   (3)  $12.50 for a license issued on or after April 1 but before July 1 of the same year.

   (b)  An applicant for annual renewal of a subdealer's license shall pay a fixed fee of $25.

§ 150.22.  Quart-equivalent fee.

   (a)  In addition to the fixed fee imposed under § 150.21(b) (relating to fixed fees), an applicant for annual renewal of a subdealer's license shall pay an annual quart-equivalent fee calculated by dividing the total quarts of milk purchased during the previous calendar year by the number of months in which the subdealer engaged in business. The Board will assess the fee in accordance with the following schedule:

Avg. Qts. Purchased per Month	Annual Fee
1--29,999	$ 50
30,000--59,999	100
60,000--119,999	150
120,000--149,999	200
150,000--199,999	250
200,000--299,999	300
300,000--399,999	400
400,000--599,999	500
600,000--799,999	800
800,000--999,999	1,200
1,000,000 and over	1,400

   (b)  As used in subsection (a), ''quarts'' means the total volume of milk for which the Board sets a wholesale price expressed in quart equivalents.

§ 150.23.  Time for payment of fees.

   (a)  A new applicant for a subdealer's license shall pay the fixed fee imposed under § 150.21(a) (relating to fixed fees) when the applicant submits the milk dealer/subdealer license application.

   (b)  An applicant for renewal of a subdealer's license shall pay the fixed fees imposed under § 150.21(b) and the quart-equivalent fee imposed under § 150.22 (relating to quart-equivalent fee) when the applicant submits the milk dealer/subdealer license renewal application.

§ 150.41.  (Reserved).

§ 150.42.  (Reserved).

LICENSE FEES OF MILK HAULERS

§ 150.51.  Fixed fees.

   A new applicant for a milk hauler's license and an applicant for annual renewal of a milk hauler's license shall pay a fixed fee of $30.

§ 150.52.  Hundredweight fee.

   In addition to the fixed fee imposed under § 150.51 (relating to fixed fees), a milk hauler shall pay a fee of $.005 per hundredweight for milk hauled during the license year. The fee shall apply to:

   (1)  Milk picked up at a producer's farm located in this Commonwealth and delivered to a milk dealer located in this Commonwealth.

   (2)  Milk picked up at a producer's farm located outside this Commonwealth and delivered to a milk dealer located in this Commonwealth.

   (3)  Milk picked up at a producer's farm located in this Commonwealth and delivered to a milk dealer located outside this Commonwealth.

§ 150.53.  Time for and manner of payment of fees.

   (a)  A new applicant for a milk hauler's license and an applicant for renewal of a milk hauler's license shall pay the fixed fee imposed under § 150.51 (relating to fixed fees) when the applicant files the license application, Form PMMB-77B or Form PMMB-77 (available from the Board Office or website).

   (b)  Payment of the hundredweight fee shall be remitted by a licensed milk hauler in full to be received in the office of the Board by the 30th day of the month immediately succeeding the month in which the milk was hauled or the nearest business day thereafter (March 1 for January reports). The payment shall accompany the Milk Hauler's Monthly Report, Form PMMB-79 (available from the Board Office or website), which is also due on that date.

CERTIFICATION FEES OF MILK TESTERS

§ 150.61.  Examination fee.

   The fee to take the Board-approved examination for a certificate of proficiency in milk testing is $25, payable when the examination is taken. The examination fee is not refundable and may not be applied toward payment of the fixed fees in § 150.62 (relating to fixed fees for new and renewed certificates).

§ 150.62.  Fixed fees for new and renewed certificates.

   A new applicant for a milk tester's certificate and an applicant for renewal of a milk tester's certificate shall pay a fee of $20, which shall accompany the milk tester certificate application (available from the Board Office or website).

CERTIFICATION FEES OF MILK WEIGHERS AND SAMPLERS

§ 150.71.  Examination fee.

   The fee to take the Board-approved examination for a certificate of proficiency in milk weighing and sampling is $25, payable when the examination is taken. The examination fee is not refundable and may not be applied toward payment of the fixed fees in § 150.72 (relating to fixed fees for new and renewed certificates).

§ 150.72.  Fixed fees for new and renewed certificates.

   A new applicant for a milk weigher and sampler's certificate and an applicant for renewal of a milk weigher and sampler's certificate shall pay a fee of $20, which shall accompany the milk weigher/sampler certificate application (available from the Board Office or website).

OTHER FEES

§ 150.81.  Transfer fee.

   The fee to transfer a license under section 407 of the act (31 P. S. § 700j-407) is $50.

§ 150.82.  Fees for copying and certifying Board documents.

   Fees for providing copies of, or for certification of, Board documents will be in an amount that will fully offset the costs incurred by the Board in providing the documents or certification.

[Pa.B. Doc. No. 03-2450. Filed for public inspection December 26, 2003, 9:00 a.m.]