This report analyzes a proposed fee that will be collected on fluid milk sold by retailers and the proposed subsidy program that will establish a green price for dairy farmers. It analyzes both the proposed Connecticut and the proposed Massachusetts legislation. The green price is to be set by the proposed Connecticut Milk Commission or the Massachusetts Commissioner of Agriculture at a level to sustain dairy farmers in the state. The green price reflects the added cost of production of milk and the added value that is not paid to farmers by the current milk channel. The added value includes the value of open space preservation, environmental stewardship, cultural diversity, tourism, and preservation of New England history. We also analyze the proposed retail threshold pricing bills in both states. The CT Milk Commission or Massachusetts Commissioner of Agriculture can, if it so decides after industry wide hearings, set this policy to limit the transmission of any fee to consumers. Following New York’s use of a similar policy since 1991, this could limit retail margins In Appendices A (Connecticut) and B (Massachusetts) we suggest revised language to these bills to incorporate the analysis of this paper. The proposed Connecticut retail fee bill contains a fee rate schedule that is based on the Hartford, CT announced Class 1 price in the Northeast Federal Milk Market Order. The fee rate ranges from a penny per gallon when the Class 1 price is between $18.02 and $18.49 per hundredweight to 10 cents per gallon when the Class 1 price is below $15.50 per hundredweight. The fee per hundredweight ranges from 0 to $1.16. The proposed fee schedule is unattractive for two reasons. First, it produces an extremely saw toothed raw milk price series that injects unnecessary uncertainty into milk pricing. Second, it does not raise sufficient revenue to attain desired green price levels. We present an alternative method to set the fee rate that is based upon readily available data, most notably the announced Class 1 price, the recent fee rate, and the desired green price level. Statistical analysis of data from 2001 through 2006 gives us the parameters to set future fee rates. We have written the parameters for a $17 green price in the Connecticut bill (Appendix A) and the Massachusetts bill (Appendix B).