AG ONE Newsletter September 3, 2018

FEDERAL FARMER TARIFF AID PROGRAM BEGINS SEPTEMBER 4

The Trump Administration $12 billion program to assist farmers who are being adversely affected by the ongoing trade disputes and retaliatory tariffs begins September 4, 2018.

The Market Facilitation Program (MFP) will provide direct payments to PA farmers producing soybeans, sorghum, corn, wheat, dairy, and hogs.  Its purpose is to allow farmers the flexibility over the timing of marketing their products and to help farmers adjust to disrupted markets.  Capped at $125,000 per agricultural producer, payment rates are:

  • Dairy: 12 cents per hundredweight (cwt) – Hogs: $8.00 per head
  • Soybeans: $1.65/bushel                                – Corn:  one cent/bushel
  • Wheat: 14 cents/bushel                                 – Sorghum: 86 cents/bushel

Payment equals 2018 actual production times 50% times payment rate. There must be a crop acreage report on file with the Farm Service Agency (FSA) and the farmer must be actively involved in farming except for hogs and dairy.  Dairy production is based on historical product reported for MPP-Dairy and dairy operations must have been in operation on June 1, 2018.  Hog payments are based on the number of live hogs as of August 1, 2018.  There may be a second payment period to be determined.

HOW TO APPLY

Farmers must have had an adjusted gross income of less than $900,000 in tax years 2014, 2015, and 2016.  Market Facilitation payments are capped at $125,000 per person or legal entity.  This program is being administered by FSA with application form at www.farmers.gov/mfp Sept. 4.  Contact: Becca Csutoras, FSA Program Chief for PA, 717-237-2117

There are two additional elements to the Market Facilitation Program.  First is a massive commodities $1.2 billion purchase by USDA Food & Nutrition Service (FNS) based on an economic analysis of harms to U.S. producers from retaliatory tariffs.  Examples are Dairy $84.9 million, apples $93.4 million, potatoes $44.5 million, and pork $558.8 million.

Second is a $200 million program administered by USDA Foreign Agriculture Service (FAS).  The Agricultural Trade Promotion provides assistance to eligible farm groups who are participating in trade shows/consumer marketing/point of sale demonstrations, etc.  Applications for this program will be accepted until November 2, 2018 or until funding is exhausted with funds allocated in early 2019.  NOTE: This program includes a wider range of products including fish and forest products.

UPCOMING

  • The House Finance Committee is holding a hearing on House Bill 2329 (Hahn-R-Northampton) providing for a 100% property tax exclusion for farmsteads.
  • The House Professional Licensure Committee will hold a hearing on Senate Bill 780 (Elder-R-Beaver) setting standards for Telemedicine –of particular value in rural areas.
  • A Beginning Farmer Workshop organized by Farm Link will be offered September 14 in Lancaster.  Details: Michelle Kirk 717-705-2121
  • National Farm Safety and Health Week is September 16-22.
  • The same week is the National Septic Smart Week whose purpose is to remind property owners of the importance on onlot septic system maintenance.
  • On October 1, the House Agriculture & Rural Affairs Committee is convening a hearing on House Bill 2293 sponsored by committee Chair Martin Causer (R-Cameron/McKean/Potter).  This bill builds a firewall around monies received by the state for Broadband development.

PDA OPEN FOR AG RESEARCH PROPOSALS

Posted In PA Bulletin (www.pabulletin.com) August 25 was guidance from the PA Department of Agriculture on the types of research projects being considered in the current state fiscal year.

Research targets include: multi-year funding for previously approved projects; Spotted Lanternfly; Powdery mildew in hops; alternative uses for fluid milk; support for Dairy research and development; “blockchain technology in agricultural food systems”; identifying gaps in agricultural infrastructure systems; economic impact of Chesapeake Bay Total Maximum Daily Load; Chesapeake Bay voluntary conservation efforts: hemp’s market potential; workforce development; hydroponics and aquaponics; urban agriculture; and Pollinator Protection Plan.

Apply to PA Department of Agriculture, Research Solicitation Review Committee, Room 211, 2301 North Cameron Street, Harrisburg, PA 17110.  Application deadline is September 28, 2018

REGULATORY UPDATES

  • The Independent Regulatory Review Commission (IRRC) is holding a September 13 public meeting to consider two PA Department of Agriculture regulations, 2-185, Vegetable Marketing and Research Program and 2-187 Weighmasters.
  • The PA Fish and Boat Commission has released six proposed regulations for public view.  Details: https://www.pabulletin.com/secure/data/vol48/48-35/index.html
  • August 28 concluded the comment period for the Department of Environmental Protection (DEP) Office of Environmental Justice proposal which mandates Environmental Justice Areas public hearings for so-called “Trigger” permits such as CAFO and biosolid.
Draft Environmental Justice Public Participation Policy (012-0501-002) Policy   8/28/2018 View comments

AG ONE Newsletter August 8, 2018

AG PROGRESS DAYS GOVERNMENT ACTIVITIES

August 15 includes a number of government affairs activities at AG Progress Days. First is a joint hearing convened by the Senate and House Agriculture & Rural Affairs Committees August 15 to hear testimony from major farm groups on issues of importance to them.  Expect a focus on PA’s dairy industry, Broadband access, and sustainability issues.  Information: Kerry Golden kgolden@pahousegop.com and Destiny Zeiders dzeiders@pahouse.net. Other meetings are:

  • The annual Government and Industry Luncheon (tickets required). Details: Corinna Fisher 814-863-2822, fisher@pasu.edu. Another governmental meeting will be the
  • U.S. Rep. ‘G.T.’ Thompson has an afternoon meeting to discuss the 2018 Farm Bill.  As voce-chair of the House Agriculture Committee, he is the only person from the Mid-Atlantic States from either party to serve on the Farm Bill Conference Committee.
  • On August 16, DEP’s Agricultural Advisory Board will convene.  Details: DEP’s Jay Braund 717-772-5636.

PA LEGISLATOR GETS NATIONAL NOD

PA Rep. Kristin Phillips-Hill (R-York) was named to the Intergovernmental Advisory Committee of the Federal Communications Commission (FCC) which will give advice on telecommunications issues to that agency.  She is the only Pennsylvanian on this particular committee and is known for her bipartisan work (with Rep. Pam Snyder-D-Fayette/Greene/Washington) on a package of bills seeking to expand access to Broadband to rural areas.

RESOURCES FOR AGRICULTURAL PRODUCERS

  • AUGUST 6, 2018 Application period for Resource Enhancement and Protection Program (REAP) begins.  REAP provides tax credits to farmers, landowners, and businesses for implementing practices which increase efficiency while protecting natural resources.  REAP is a first-come, first-serve program.  Details: 717-705-4032 https://www.agriculture.pa.gov/Plants_Land_Water/StateConservationCommission/REAP/Pages/default.aspx
  • Food Safety Compliance: The PA Department of Agriculture is offering free on-farm readiness reviews to informally review areas of compliance with the Food Safety Modernization Act (FSMA).  FSMA Rules apply to farmers with produce operations above a certain threshold.  Details: 717-787-4315

 REGULATORY AGENDAS RELEASED

Each year, the Governor’s Office lists those regulations being considered by each government agency.  The full list is published in the PA Bulletin issue for August 4: www.pabulletin.com

The PA Agriculture Department (PDA) lists six regulations.

  • Agriculture Conservation Easement Purchase Program Regulations (#2-192) proposed September 2018; Regulatory contact is Douglas Wolfgang 717-783-3167
  • PA Preferred Program Regulations proposed September 2018; Regulatory contact is Laura England 717-783-8462
  • PA Vegetable Marketing Program (#2-185) October 2018 as a final rule; Regulatory contact is Bill Troxell 717-694-3596
  • Milk Sanitation (#2-191) regulation will allow PA raw milk/cheese producers to produce unpasteurized milk/cheese where there is a Federal identity for that cheese and the standard of identity allows for production of standardized cheese from raw milk proposed for September 2018; Regulatory contact is Lydia Johnson 717-787-4315 NOTE: This was posted in the August 4 PA Bulletin.

The two other PDA regulations are Rabies Prevention and Control (#2-188) and Weights and Measures (#2-187).

PennDOT has several.

  • Oversize and Overweight Loads and Vehicles (Automated Permit Routing Analysis System proposed Summer 2018; Regulatory contacts are Glenn Rowe PE 717-783-6479 and Jeffrey Spotts 717-787-5299
  • Hazardous Material Transportation Summer 2018 as final; Contacts are Rowe and Spotts
  • Hauling in Excess of Posted Weight Limits proposed Fall 2018; Contacts are Spotts and Halley Cole, PE 717-783-6146
  • Access to and Occupancy of Highways by Driveways and Local Roads. There are two. The first is meant to be a clarification of some parts of the application process – final in Summer 2018.  The second is meant as a major re-write of Chapter 441 (67 Pa. Code) to include comments received redefining the term “owner” (“legally cognizable ownership interests”).  Regulatory contacts for both are Spotts and Richard Roman, PE 717-6899.

The non-regulatory agenda for the PA Department of Environmental Protection was issued in July. The Agenda is available on the Department’s eLibrary web site at http://www.elibrary.dep.state.pa.us/dsweb/View/Collection-11958  (select ”Publications,” then ”Office of Policy,” then ”Non-Regulatory Agenda”).  Questions regarding the Agenda should be directed to Abbey Cadden, Technical Guidance Coordinator, Department of Environmental Protection, Policy Office, 400 Market Street, Harrisburg, PA 17101 at (717) 783-8727 or ra-epthepolicyoffice@pa.gov .

COMMEMORATIVES

AG ONE Newsletter October 30, 2017

BUDGET SAGA (FINALLY) ENDS

Update:

Please note the following updates to the AG ONE Newsletter below posted earlier today. These were signed into law today by Governor Tom Wolf:


HB 790
sponsored by House Agriculture & Rural Affairs Minority Chair Eddie Day Pashinski (D-Luzerne) (controlled and noxious weeds) is Act 46

HB 542
Tax Code (taxes on fireworks, $1.5 billion loan from Tobacco Settlement, etc.) is now Act 43.

HB 785 Capital Facilities Debt Act (state indebtedness levels) is now Act 45.

HB 674 Fiscal Code (takes $200 million from an insurance company reserves; gives Governor discretion as to where $300 million will come from dedicated funds) is now Act 44

HB 118
(Labor & Industry inspection fees) is now Act 40.

SB 651
Capital Budget (authorization wish list for wide variety of state bricks and mortar projects) is now Act 52.

HB 271 (expands gambling in hopes of generating $200 million more revenue to the state) is now Act 42.

*****

With House action October 25 and 26, the revenue side to the State Budget was sent to Governor Wolf for his signature.  He has ten days to approve, veto, or let the legislation go into effect without his signature.  Some major elements include:

  • Borrowing of $1.5 billion from future payments to Pennsylvania from the Tobacco Master Settlement to be paid back within 30 years  NOTE:  House Bill 542, page 271 http://www.legis.state.pa.us/CFDOCS/Legis/PN/Public/btCheck.cfm?txtType=PDF&sessYr=2017&sessInd=0&billBody=H&billTyp=B&billNbr=0542&pn=2598
  • Taking $200 million from reserves held by the Joint Underwriting Association (JUA), the medical malpractice insurer of last resort.  The Administrative Code bill specifies that if JUA does not hand over the money by December 1st, it will be abolished.  JUA says that it is illegal for the state to “seize” insurance company reserves and that it will sue to prevent this from occurring.  NOTE: House Bill 674, Article II-D, section 201-D  page 14: Similar language is found in House Bill 118 but this specifies that the Supreme Court shall have exclusive jurisdiction to hear any challenge. http://www.legis.state.pa.us/CFDOCS/Legis/PN/Public/btCheck.cfm?txtType=PDF&sessYr=2017&sessInd=0&billBody=H&billTyp=B&billNbr=0674&pn=2624
  • $200 million to come from gambling expansion (House Bill 271)
  • Senate Bill 651, the Capitol Budget, is a bricks and mortar wish list for projects funded by the Commonwealth.  Just because projects are listed here does not mean that the money is actually there. This is an authorization bill.  Examples for Capital Budget items might be a new barn for the Farm Show complex or significant upgrading to a state building HVAC system.
  • New Labor & Industry inspection fees schedule (boilers, elevators, ski lifts, etc. are found in Administrative Code bill, House Bill 118 starting on page 12.  www.legis.state.pa.us
  • New taxes on fireworks: 12% for consumers buying fireworks; annual fees ranging from $2,000 to $20,000 for permanent structures selling fireworks; and $3,000 per year for temporary structures.  One miscellaneous insurance provision is a $50,000 bond requirement for municipal fireworks displays.  (HB 542 page 257 dealing with new taxes on fireworks)

FARM SHOW LOAN IN LIMBO

In limbo is the Governor’s unilateral decision October 4 to borrow ahead (“securitize”) future profits from the PA Liquor Control Board and his October 9 pronouncement that PA would take out an equity loan on the Farm Show Complex owned by the state.  His rationale was that he would take budget matters into his own hands, absent a legislative resolution to the State Budget impasse. PSCFO has requested a meeting with Governor Wolf to discuss the Farm Show Complex loan issue.

AND…THERE IS A SLEEPER BUDGET ISSUE.

House Bill 674 contains this section:  SECTION 1726-G.FUND TRANSFERS.

DURING THE 2017-2018 FISCAL YEAR, $300,000,000 SHALL BE

TRANSFERRED FROM AMOUNTS AVAILABLE IN SPECIAL FUNDS AND

RESTRICTED ACCOUNTS TO THE GENERAL FUND.

This is the ultimate outcome of those seeking to balance the State Budget by taking monies from over 50 specified dedicated funds.  The Senate derailed that notion but this final language gives the Governor the discretionary authority to decide from which funds this $300 million shall come.  HB 674 does not contain language limiting his choices so they might or might not be  agriculture or environmental funds. PSCFO sent a heads up memo to Council members about this section.

SENATE BANKING & INSURANCE COMMITTEE HOLDS RX PRICE HEARING

On October 23, the Senate Banking & Insurance Committee convened a prescription drug price transparency hearing relative to Senate Bill 637 (White-R-Indiana).  It presented starkly contrasting views between the pharmaceutical industry which maintained that manufacturing costs increases are quite reasonable versus insurers and prescription benefit managers (PBMs) which pointed accusing fingers at the drug industry for unwarranted price increases.  Testimony also came from the PA State Grange which said that price transparency could give insurance companies the ability to negotiate more effectively because they could compare pricing practices between states, such as a hypothetical Epi-pen charge of $150 in one state versus $600 in PA.

WEED BILL GOES TO GOVERNOR (No, not that weed…)

Presented to the Governor October 25 was House Bill 790 regarding controlled and noxious weeds.  Prime sponsor is House Agriculture & Rural Affairs Minority Chair Eddie Day Pashinski (D-Luzerne).

EXPECT WORKERS’ COMPENSATION HIKES

The PA Compensation Rating Bureau (PCRB) revised loss cost filing goes into effect November 1st. This translates into a general increase in Workers’ Compensation premiums of 6.06%, necessary to adapt to the Supreme Court striking down a major provision of the Workers’ Compensation Act regarding permanent  impairment evaluation standards.

YOUTH GARDENING GRANTS up to $500 will be awarded by Katie’s Krops.  Eligible are youths aged 9-16.  Harvests must be donated to food banks.  Application deadline is December 31.  Details:  http://www.katieskrops.com/start-a-garden.html House Bill 790 (Pashinski-D-Luzerne) passed the Senate 49-0 on October 18 and was referred to the House Rules Committee.  The House now must consider amendments made to the bill in the Senate.

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.