Gov. Rendell this week signed legislation into law giving his approval to the Resource Enhancement and Protection Act (REAP) that gives farmers tax credits for installing conservation practices.

The Chesapeake Bay Foundation and more than 65 environmental, sportsmen, agricultural groups, and businesses throughout the Commonwealth joined together in applauding the passing of REAP.

REAP was included in Senate Bill 97 (D.White-R-Indiana) that made several other changes to the Tax Code. The bill now becomes Act 55.

“We appreciate the steadfast commitment of REAP’s sponsors to seeing this legislation through, and for their dedication to improving water quality while helping farmers make ends meet,” said Matthew Ehrhart, Executive Director of CBF’s Pennsylvania office. “They clearly understand that a healthy environment and healthy farms go hand in hand, and that REAP will make significant strides toward meeting Pennsylvania’s obligations to reduce pollution going into our streams, rivers, and the Chesapeake Bay.”

REAP is a bipartisan measure sponsored by Representatives Jerry Stern (R-Blair) and Peter Daley (D-Washington) and Senators Mike Waugh (R-York) and Michael O’Pake (D-Berks), along with 79 other co-sponsors.

REAP provides transferable state tax credits to Pennsylvania farmers who proactively plan and implement highly effective conservation practices to reduce runoff. Businesses that sponsor such conservation projects will also be eligible for corresponding tax credits. REAP will improve water quality and strengthen our agricultural communities and the economy statewide.

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 development of manure management plans on farmlands, and forested buffers on non-farm lands, would also be eligible for credit.

Each farmer enrolled in the program is eligible for up to $150,000 in tax credits which can be extended over a period of 15 years. There is no limit on amount of tax credits a business sponsoring projects on farms can be awarded.

The REAP Program will take effect on October 23 (90 days from the day Gov. Rendell signed the bill into law) and will be administered by the State Conservation Commission.

The Commission will develop the necessary tax credit application and set a deadline for applying for the credits this fiscal year, hopefully approvals will come in time for the spring construction season.

The law lays out a two-step application process for the tax credit— 1) a determination by the Commission the project is eligible so farmers know they will receive the tax credit before they begin work, and 2) the Department of Revenue formally issues the tax credit when the project is certified as complete to the Commission.

Applications for the REAP tax credit will be on a first-come, first-served basis, so potential applicants are encouraged to start to put together the plans and information they need now in order to apply by the deadline to be set by the Commission. The Commission will have 90 days to review the application to determine whether they are eligible for the tax credit.

Projects eligible for the tax credit include:

75 Percent Tax Credit

· Development of a voluntary or mandatory nutrient management plan;

· Development of an agricultural erosion and sediment control plan or conservation plan;

· Design and implementation of best management practices necessary to abate stormwater runoff, loss of sediment, loss of nutrients and runoff of other pollutants from an animal concentration area;

· Design and implementation of best management practices necessary to restrict livestock access to streams if there is established and maintained a riparian forest buffer with a minimum width of 50 feet; or

· Establishment of a riparian forest buffer with a minimum width of 50 feet;

50 Percent Tax Credit

· Design and implementation of agricultural best management practices or the installation and use of equipment, provided that the best management practice or equipment is necessary to reduce existing sediment and nutrient pollution to surface waters for agricultural operation. Best management practices or equipment will be identified by the State Conservation Commission and may include manure storage systems, alternative uses for manure, filter strips, grassed waterways, management intensive grazing systems and no-till planting equipment; or

· Design and implementation of best management practices necessary to exclude livestock access to streams through fencing, stabilized crossings and improved water systems, if there is established and maintained a vegetated riparian or riparian forest buffer with a minimum width of 35 feet.

25 Percent Tax Credit

· After July 1, 2008 - remediation of legacy sediment if the legacy sediment is exposed and discharging or threatens to discharge into surface waters and the project meets the standards established by the Commission.

To learn more as details develop, visit the State Conservation Commission webpage and CBF’s REAP webpage.

7/27/2007