MILK MARKETING BOARD Presubmission Schedule, Prehearing Conference and Hearing; Milk Marketing Area No. 4 [27 Pa.B. 4402] Under the Milk Marketing Law (31 P. S. § 700j-101 et seq.) the Milk Marketing Board (Board) will conduct a public hearing for Milk Marketing Area No. 4 on October 8, 1997, commencing at 9 a.m. in Meeting Room B on the second floor of the Farm Show Complex, Cameron and Maclay Streets, Harrisburg, PA. If necessary, the hearing will be continued on October 9 at the same time and location.
The purpose of the hearing is to receive evidence concerning minimum prices milk dealers shall pay to producers for various classes of milk; minimum prices milk dealers shall charge for milk, including prices to be charged to wholesale customers such as stores, restaurants and institutions; and minimum prices to be charged to consumers for milk sold for consumption off the premises. Evidence will also be received concerning the various types, classifications and containers of fluid milk and milk products.
To ensure a complete hearing record, the Board has established the following evidentiary guidelines for significant categories of information:
1. Evidence of processing, packaging and delivery costs and points shall be derived from the PMMB-60 financial statements of the cross-section dealers for calendar year 1996, along with updated information reflecting current increases and decreases in labor, ingredients, container, insurance and utility expenses. In addition, the Board wishes to receive evidence on current costs associated with Class II products. ''Current'' means not later than August 31, 1997.
2. With regard to labor, insurance and utility costs, figures should be supported by evidence sufficient to enable the Board to evaluate the underlying methodology. At a minimum, the Board will expect to receive the following evidence:
a. Labor expense.
i. Based on data from Schedule B-3, column (20) of the 1996 PMMB-60s, the weighted average total for the cross- section of the labor costs identified on lines 1--9 of that schedule.
ii. Based on data from Schedule B-2 of the 1996 PMMB-60s, the weighted average total for the cross-section of the labor costs identified on lines 1--9 for each of the 12 cost center columns: receiving, laboratory, and field work; standardization and pasteurization; bottling; blow-molder; bottle washer; manufacturing; ice cream manufacturing; ice cream hardening; cold room; delivery; ice cream delivery; and selling. For those 12 columns, the distribution of labor costs from Schedule B-3 in accordance with the percentages shown on Schedule B-7.
iii. Labor cost data as described in paragraph (i) and bottling points for the cross-section for corresponding periods in 1996 and 1997. These periods may not be shorter than 4 weeks. (Examples: April--June 1996 and April--June 1997; August 1996 and August 1997)
b. Insurance expense. Same as for labor, except 1996 data shall be based on insurance expense from line 24 on Schedules B-2 and B-3.
c. Utilities expense. Same as for labor, except 1996 data shall be based on utilities expense from line 23 on Schedules B-2 and B-3.
The hearing will also include the following items 3--8:
3. Delivery costs/discount system. Using the delivery ranges for which discounts are available under the current order or found to be prevalent during the auditing process, evidence on the number of deliveries at each range, the number of controlled and noncontrolled points at each range and the total cost and cost per point at each range. A representative statistical sample of the routes of each cross-section dealer is acceptable. Testimony should include recommendations on discount strategies--such as percentage discounts, cents per quart discounts, school discounts, and multi-store discounts--or on alternatives to discounts, such as stop charges.
4. Small container adjustment. Evidence should include filling speeds and containers per case for each container size.
5. Reasonable profit margins for dealers and retailers.
6. In-store handling costs. Evidence should be as detailed and specific as is compatible with protecting proprietary information.
7. Adoption of cost replacement. Testimony favoring cost replacement should include recommendations for implementing such a system, specifically, which costs should be updated and what methodologies should be used.
8. Elimination of the bracket system.
The Board expects to receive from staff evidence based on independent studies for evidentiary items 1--4 and 6, along with testimony addressing items 5, 7, and 8. Other parties who address items 1--8 should tailor their evidence to the requirements set out in this notice. These evidentiary items are not intended to be inclusive. Parties are invited to present additional relevant evidence on, for example, interest expense and profits/losses on bulk sales.
The staff of the Board is deemed to be a party to this hearing, and the staff's attorney is deemed to have entered her appearance on their behalf. Other persons that may be affected by the Board order fixing prices in Area 4 may be included on the Board's list of parties by:
* Having their counsel file with the Board, on or before September 8, a notice of appearance substantially in the form prescribed by 1 Pa. Code § 31.25, which shall identify by name and address the party on whose behalf the appearance is made. Thereafter, documents and other written communications required to be served upon or furnished to that party shall be sent to the attorney of record.
* If unrepresented by counsel and wishing to appear on their own behalf under 1 Pa. Code § 31.21, filing with the Board, on or before September 8, an address to which documents and other written communications required to be served upon them or furnished to them may be sent.
A. Each party shall file with the Board seven copies and serve on all other parties one copy of the following on or before September 19, 1997:
1. A list of witnesses who will testify for the party. A witness who will be offered as an expert shall be so identified, along with the witness's area or areas of proposed expertise.
2. A statement of the subjects concerning which each witness will testify.
3. Each exhibit to be presented, including testimony to be offered in written form.
B. Requests by parties for Board staff to provide data pertinent to the hearing shall be made in writing and received in the Board office on or before September 12, 1997.
C. A list of rebuttal witnesses and copies of rebuttal exhibits shall be filed with the Board (seven copies) and served on all other parties (one copy) on or before September 29, 1997.
D. Parties shall have available in the hearing room at least 20 copies of the exhibits described in paragraphs A and C for distribution to nonparties attending the hearing.
E. Parties that wish to offer in evidence documents on file with the Board, public documents, or records in other proceedings before the Board, or who wish the Board to take official notice of facts, shall comply with, respectively, 1 Pa. Code § 35.164, 35.165, 35.167 or 35.173. Whenever these rules require production of a document as an exhibit, copies shall be provided to each Board member and to all other parties; in addition, at least twenty 20 copies shall be available for distribution to nonparties attending the hearing.
The Board may exclude witnesses, exhibits or other evidence of a party that fails to comply with the requirements of paragraph A, C or E.
A prehearing conference for all parties will be held at 1:30 p.m. on October 6, 1997, in Room 110 of the Agriculture Building, 2301 North Cameron Street, Harrisburg, PA. Parties shall come prepared to address requests for the production of documents relied on in formulating their testimony and exhibits.
The filing address for the Board is Milk Marketing Board, Room 110, Agriculture Building, 2301 North Cameron Street, Harrisburg, PA 17110-9408.
Persons who require this information in an alternate format should call (717) 787-4194 or (800) 654-5984 (PA Relay Service for TDD Users).
O. FRANK DEGARCIA,
Executive Secretary[Pa.B. Doc. No. 97-1374. Filed for public inspection August 22, 1997, 9:00 a.m.]
