Help Us Cleanup Our Barnyard!

The House Agriculture and Rural Affairs Committee held an informational meeting this week on House Bill 2878 (Stern-R-Blair, Hershey-R-Chester, Daley-D-Washington) that would establish the Resource Enhancement and Protection Tax Credit Program.

PaED Video Blog: Watch Matthew Ehrhart, Pa Director Chesapeake Bay Foundation, commenting on  REAP.

“I introduced House Bill 2878 because I firmly believe that this new and innovative approach to encouraging the implementation of best management practices merits serious discussion by all stakeholders,” said Rep. Stern. “As the Representative from a district where there is a large and viable agricultural sector dominated by family farms, I am very aware that the vast majority of these farmers put a high priority on managing their farm operations in an environmentally friendly manner.

“I believe we can document that there is considerable unmet demand from agricultural producers for financial assistance to support the adoption of additional conservation practices.”

The bill provides personal and business state tax credits ranging from 25 to 75 percent of the cost to install best management practices like barnyard improvements, riparian buffers, stream fencing and other practices.

The Committee heard comments on the bill from Matthew Ehrhart, Pennsylvania Director, Chesapeake Bay Foundation, Karl Brown, Executive Secretary of the State Conservation Commission, Joel Rotz, State Government Relations Director, PA Farm Bureau, Eileen McNulty, Executive Deputy Secretary, Department of Revenue, and from Walt Peechatka, Executive Vice President of PennAG Industries Association.

“The Chesapeake Bay Foundation believes this proposal, which would provide transferable tax credits to producers across the state to install BMPs, represents a bold, first-in-the-nation step toward expanding conservation opportunities and distinguishing Pennsylvania as a leader in innovative approaches to farm-friendly environmental protection” said Matthew J. Ehrhart, Pa CBF Executive Director. “This statewide legislation would be one of the most important state programs enacted in the history of the Chesapeake Bay restoration effort.”

Rising costs coupled with weak commodity prices limit the options available to producers to meet new standards of environmental protection, such as plans that assign where pollutants must be reduced as well as phosphorus-based nutrient management plans. As a result, new opportunities must be developed to assist agricultural producers in ways that support economic viability while improving the quality of our land and water resources.

“This legislation recognizes that while most producers are committed stewards of the land, they need additional funding and new tools to help improve their operations” said Ehrhart. “Agriculture has been identified as a leading source of water quality degradation, but funding is well below necessary levels. REAP would go a long way toward filling these gaps.”

“The program gives higher tax credits for those BMPs that provide the greatest benefit to our water quality, wildlife and fisheries—practices that provide the biggest bang for the buck,” said Ehrhart. “This prioritization is critical because the demand for financial assistance under traditional conservation programs far exceeds available funds from either the state or federal government.”

REAP would also have a dramatic impact on our surface drinking water supply. Almost 8 million Pennsylvania residents’ drinking water comes from surface waters.

EPA estimates that, on average, every $1 spent on source protection saves $27 on water treatment, and in some areas it costs much more. An analysis of the Gettysburg source water protection program yielded a cost ratio of one dollar spent to $187 dollars saved.

Based on Pennsylvania’s Chesapeake Bay Tributary Strategy, the PA Department of Environmental Protection has estimated that approximately $215 million per year is needed in state and federal funds to meet the Commonwealth’s commitment to reduce water pollution to the Bay.

Pennsylvania currently spends about $45 million – leaving a $170 million dollar per year gap in the Chesapeake Watershed alone. In 2004 the NRCS alone had conservation funding requests from Pennsylvania farmers for $37.5 million more than was available. This figure does not account for the many farmers who have given up applying, or those individuals who choose, for a variety of reasons, not to work with government programs.

REAP goes one step further by encouraging private investment in BMPs, and expands the capacity of the private sector to promote environmental improvements on farms. In this way, Pennsylvania businesses of all sizes can become new partners with Conservation Districts, Natural Resource Conservation Service and other agencies in working with producers.

“Strengthening the private sector’s role in promoting farm conservation is another key goal of the legislation,” said Ehrhart. “REAP creates a sponsorship program that allows businesses to sponsor projects on farms in exchange for tax credits in a way that minimizes the government’s role in the program.”

“REAP does seem to be an innovative approach in helping Pennsylvania’s farm families economically manage the additional costs they will incur in implementing environmental improvements on their farms,” said Joel Rotz, Pa Farm Bureau & Grange. “REAP will provide a meaningful opportunity for the farmer to partner with a business …and to reach farmers who do not normally support receiving government assistance payments.”

“There is a great need to identify creative approaches in assisting farmers to meet the every-increasing level of environmental regulation that threatens their economic viability in this state,” said Rotz. (Because the bill was just introduced in July, the Farm Bureau and Grange have not yet taken a formal position on the bill, but they expect to soon.)

“Anything we do to cleanup the Chesapeake Bay and our streams is a positive,” said Walt Peechatka, PennAg Industries. “REAP provides an excellent opportunity to help farmers install good conservation practices.”

Pennchatka went on to make suggestions on fine-tuning portions of the bill. (PennAg Industries has not taken a formal position because the bill was recently introduced, but also expects to shortly.)

Both the Department of Revenue and the State Conservation Commission offered comments on the details of the bill and suggesting the legislation be considered during discussion of the state’s 2007-08 budget.

Under REAP, applicants are eligible for transferable tax credits up to a total of $150,000 over the life of the program. Businesses can sponsor an unlimited number of projects on farms. To provide flexibility, tax credits under REAP may be sold by a taxpayer who does not have a tax liability of their own to another taxpayer who does. This allows farmers with minimal tax liability to participate in the program. Taxpayers can also roll tax credits forward to cover future tax liabilities for up to 15 years.

The legislation caps the number of tax credits that can be issued over the five year life of the program. The first year up to $50 million can be issued and $100 million in each of the successive four years. The Department of Revenue would administer REAP as it does other tax credit programs.

The proposal was also introduced as Senate Bill 1286 by Sen. Noah Wenger (R-Lancaster), Sen. Mike Waugh (R-York) and Sen. Michael O’Pake (D-Berks).

NewsClip: State’s Dairy Farmers in a Squeeze

Issue NoteBook: Resource Enhancement & Protection Tax Credit Proposal

Chesapeake Bay Foundation REAP Resource Page

PaEd Video Blog: Watch Matthew Ehrhart, Pa Director Chesapeake Bay, comment on REAP legislation.

Foundation, commenting on REAP proposal.

Session Schedule

The Senate and House return to session September 25.

On the Hill

· On the Senate/House Agenda/Actions/Bills Introduced

· Senate Committee Holds Hearing on Robbins’ Home Heating Assistance Bill

Other News

· Ohio River Celebration Attracts 950 Taking Positive Actions to Improve Watersheds

· PA and Other Chesapeake Bay State Agree To Accelerate Restoration Efforts

· 3 Rivers Wet Weather Sewer Conference to be Held September 27-28

· Gardens Win Keep Pennsylvania Beautiful Community Greening Award

· DCNR Issues TreeVitalize Challenge to Chester County's Urban Areas

· October 15 is Deadline to Enter National Student Radon Poster Contest

· 6 of 10 Winners of EPA Excellence in Energy Efficiency Awards from PA

· ETAC-PennTAP Partnership Wins National Pollution Prevention Award

· EPA, Philadelphia to Promote Voluntary Pollution Reductions

· PUC Sets Hearing on Pike County 70 Percent Electric Rate Increase

· Author to Discuss Creating Livable Communities September 25

· Lancaster Seeks Nominations for 2006 Smart Growth Awards

· Global Warming and Agriculture Workshop Feature DEP, Agriculture Secretaries

· Exelon and The Conservation Fund Donate 79-Acre Susquehanna Island

· National Hunting & Fishing Day Celebrated on September 26

· Game Commission to Hold State Game Land Tours in September, October

See & Hear

Features

· Junior Environment Corps Pilot Project Launched in the Wissahickon Watershed, By Virginia Ranly, Watershed Programs Coordinator, Schuylkill Center for Environmental Education

· Autumn’s Gold Includes Millions of Monarch Butterflies Migrating South, By Kathy Reshetiloff, Chesapeake Bay Naturalist, Chesapeake Bay Journal

Regulations

· EQB Adopts California Cars Standard, Another Climate Change Piece in Place

Go To: PA Environment Digest Calendar Page

9/22/2006