Committees Move Ag Easement Bills

Riparian BufferOn May 6, two agricultural easement bills moved through committee:

  • The House Local Government Committee reported out House Bill 859 (Staats-R-Bucks) excluding from tax a transfer of a perpetual agricultural conservation easement as defined by the Agricultural Area Security Law.
  • The Senate Finance Committee reported Senate Bill 556 (McIlhinney-R-Bucks) which excludes from the Real Estate Transfer Tax a conservation easement in perpetuity having as its purpose preservation of open or agricultural land to the S., Commonwealth of PA, or to a 501( c)(3) organization which has as its purpose land preservation.

Other Senate Committee Agriculture Bill Updates

  • Senate Bill 720 sponsored by Aument (R-Lancaster) has been referred to the Senate Judiciary Committee.  It would provide protection from civil liability for owners and operators of agritainment activities. Agritainment is defined as “tourism-related, recreational or educational activities located on farms in Pennsylvania such as corn mazes, pick-your-own crop harvests, hay rides and farm vacations.”  Because many activities involved in the agritainment business are frequently not covered by customary farm liability policies, farmers face a number of challenges in securing adequate coverage and face liability risks when opening up their land to the public.
  • Inheritance Tax exemption for family farm estate plans resulting in the transfer of a farm to family members is the substance of Senate Bill 580 (Gordner-R-Columbia) as a “clarification of Act 85” according to the sponsorship memo.  SB 580 was reported out by the Senate Finance Committee and re-referred to the Senate Appropriations Committee.
  • Without passage of Senate Bill 756 (Schwank-D-Berks) or similar legislation, First Industries which provides loan guarantees for farm credit institutions will sunset July 15, 2015.  SB 756 is in the Senate Community & Economic Development Committee.

State Tax Revenues Continue Upward Trend

Graph-UpThe PA Department of Revenue released figures showing January 2015 General Fund revenue at $2.4 billion, bringing year to date collections $360.4 million over estimate.  Breakdown showing year to date estimates are: Sales Tax $66.6 million more than anticipated; Personal Income Tax $400,000 over estimate; Corporate Tax Revenue $162.6 million more than anticipated; Inheritance Tax revenue $81.5 million more than anticipated; Other General Fund taxes (tobacco, malt beverage, liquor and table games) showed $23 million above estimate.  On the negative side was the Real Estate Transfer Tax which came in $28.4 million below estimates.

More Legislative Activity…

LegislationWith the de facto end of this session of the General Assembly, there has been a flurry of legislative activity on a number of bills with an impact on PA Agriculture.

House Bill 1550 (Milne-R-Chester) establishes the PA Business Development Authority as an attempt to consolidate several state loan programs into one entity. The PA Industrial Development Program as part of this consolidation specifies that loans made to an industrial project may not “cause the removal of an industrial enterprise, manufacturing enterprise, research & development enterprise, AGRICULTURE PRODUCER or AGRICULTURAL PROCESSOR from one area of this Commonwealth to another area of this Commonwealth.” Status: Presented to the Governor October 15.

House Bill 1996 (Lawrence-R-Chester) seeks to clarify the amount and percentage of the total paid to dairy farmers that comes from “over order premiums”, the Milk Marketing Board fee that is supposed to be returned to the farmer to help offset production costs. Status: Passed House 153-42 on October 14 and referred to the Senate Agriculture & Rural Affairs Committee October 15.

Senate Bill 76 (Argall-R-Schuylkill), the property tax reform bill to eliminate school property taxes and replace them with an increase in Personal Income Tax and elimination of numerous exemptions of the sales tax, was tabled by the Senate October 16, ending its legislative journey for this legislative session.

Senate Bill 491 (Folmer-R-Lebanon) states that if an individual’s declaration of estimated tax shows 2/3 of total income for the year comes from farming, the estimated tax may be paid at any time of the year on or before January 15 of the succeeding year. Although originally non-controversial, the bill died when the House Finance Committee September 22 amended SB 491 to allow for taxation options in lieu of the traditional school district property tax.

PSCFO Members Line up on Property Tax Bill

Property taxHARRISBURG – Some PSCFO member organizations have taken positions on a fiercely contested proposal to revamp the school property tax system and replace those revenues with increases in Personal Income Tax and elimination of many areas now exempted from the state sales tax.  A link to a summary of Senate Bill 76 (Argall-R-Schuylkill) follows:  http://www.senatorargall.com/propertytaxindependenceact/  SB 76 advocates were heartened by a September 16 vote by the Senate Finance Committee which advances the bill much further than ever before.

A major supporter of SB 76 is PSCFO member PA Farm Bureau.  Three PSCFO members — PA Bankers Association, PA Food Merchants Association, and Hunger-Free Pennsylvania — oppose SB 76.  Regardless of SB 76’s outcome this fall, expect the issue of property tax relief to again emerge as an issue in the General Assembly next year.

PLEASE NOTE that PSCFO has taken no official position on this bill or the position it represents.