AG ONE Newsletter November 28, 2017

Update on Farm Show “Lease Lease-Back”

Backdrop

On October 9, Governor Tom Wolf announced that he was unilaterally seeking a way to resolve the FY 2017-18 State Budget impasses with House Republicans by raising capital of up to $200 million from leasing the Farm Show Complex. Since then, various revenue measures were adopted by the General Assembly and signed into law to cover the deficit. Since the revenue legislation included borrowing ahead from future Master Tobacco Settlement payments to Pennsylvania totaling $1.5 billion, Governor Wolf dropped another initiative, to “securitize” or borrow ahead from future PA Liquor Control Board profits. The Farm Show financing process continued with bids from private sector investors starting October 13 and closing November 13. Four bids were received and the PA Department of General Services and PA Office of the Budget are reviewing them. A date has not been given as to when the winning bid will be announced.

What is the actual transaction taking place?

Called a lease lease-back, the transaction more closely resembles a home equity loan. Perhaps the Administration could have been clearer in explaining what financial investments were being done here. It would have reduced confusion among stakeholders.

Is it legal for the Governor to take this action without getting the prior consent of the General Assembly, especially since the legislature decides how much of the Commonwealth’s dollars the Farm Show will receive?

Yes. This is not a surprise to the General Assembly. Governor Tom Wolf made it very clear that he intended to do this when he gave his Budget Address to the General Assembly in February 2017. In addition, the issue was discussed at a Senate committee meeting and at innumerable separate meetings. Before deciding to take an equity loan on the Farm Show Complex, Administration legal counsel also determined that the Governor had the legal authority to make such a move.

Doesn’t this need an OK from the Farm Show’s governing body?

No. That board works on operations, not on financing arrangements such as this.

Will the Farm Show lose its ability to decide programming and conduct daily operations or will the new “owner” be able to decide how the Farm Show is managed and what shows will be held? For example, can the Farm Show Manager be ordered to do something the new “owner” wants such as more gun shows or detests (no gun shows)?

First, the word “owner” is incorrect. Whoever provides the capital for this equity loan is not the owner. The owner remains the Commonwealth of Pennsylvania. The contract has iron-clad language preventing any outside control. It is similar to a home equity loan where the lender does not have the legal authority to tell you what wallpaper to use or what has to be planted outside. The homeowner is the owner. With the Farm Show Complex, PA retains ownership.

The Office of the Budget frequently uses outside legal counsel as well as relying on attorney employees of the state to make sure PA’s interests are not compromised. Besides, any investor is making its money from interest paid on the loan and is not interested in managing the Farm Show Complex.

Will this new money be dedicated for remodeling and updating the physical structure of the Farm Show Complex?

No. This money will go into the General Fund to help balance the deficit. There is a separate effort to generate money for Farm Show renovations and updating HVAC, etc.

When the Governor said he would “securitize” future profits from the PA Liquor Control Board, he was very specific about the amount of money would be generated and the amount of interest that would be paid to service the loan. Why are there no specifics here? The PA Liquor Control Board plan is part of PA State Government so the details were known regarding the amount borrowed and the interest to pay back the loan. This seeks private sector financing and the costs connected with the equity loan would depend on the investor’s desired return on investment. Likewise, although the figure $200 million has been used publically as the amount that could be generated, the actual figure borrowed will depend on what bidders promise.

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CORRECTION TO AG ONE Newsletter 2017.18

In AG ONE Newsletter 2017.18, a legislative status report described House Bill 944 establishing a Commission for Agriculture Education Excellence as being in committee. That legislation was grafted into another School Code bill, House Bill 178 PN 2609 (Act 55 of 2017) which became law November 6 without the Governor’s signature. Text begins on page 45, Section 1549.1. .http://www.legis.state.pa.us/CFDOCS/Legis/PN/Public/btCheck.cfm?txtType=PDF&sessYr=2017&sessInd=0 &billBody=H&billTyp=B&billNbr=0178&pn=2609 This establishes the Commission for Agricultural Education Excellence to assist in developing a statewide plan for agriculture education and to coordinate PDA and Education Department efforts in doing so.

Thanks to PSCFO members Amy Bradford from PennAg Industries Association and Dr. MeeCee Baker from Versant Strategies for spotting the need for this update.

AG ONE Newsletter June 21, 2017

PSCFO ADOPTS BUDGET POLICY POSITIONS

The PA State Council of Farm Organizations (PSCFO) adopted several policy positions relating to issues facing the General Assembly, chief among these being the FY 2017-18 State Budget.  PSCFO is urging the General Assembly to restore the PA Agriculture Department’s General Government Operations (GGO) line item budget to what was originally proposed to the legislature in February ($31.612 million).  Doing so would allow the Department to continue animal, plant, food inspections at current levels versus continued erosion of PDA’s ability to handle the core function of food security.  PSCFO also urged restoration of other budget cuts in areas such as the University of Pennsylvania School of Veterinary Medicine, conservation, the agriculture research line item in PDA’s budget, etc.

The State Council also adopted two additional policy positions to:

  • Thank the PA House for voting unanimously for House Bill 176 (Pickett-R-Bradford) which exempts roadside stands from building requirements of the Uniform Construction Code (UCC).  The Senate was urged to concur and pass the bill before the start of the summer recess.
  • Support legislation that limits liability for those engaged in agri-tourism.  The point was made at the June 12 meeting that given the situation with dairy particularly, farmers must rely on additional sources of income.  Fear of a lawsuit is a real barrier.

DOG LAW REVISIONS URGED BY PDA

On June 16, the PA Department of Agriculture asked the General Assembly to take prompt action on House Bill 1463 and Senate Bill 738.  Per the Department, the Dog Law Restricted Account is nearing depletion while demands for the Department’s work in regulating and inspecting kennels, protecting stray dogs, and responding to dog bite situations have skyrocketed.  The bills would create a single state-wide system for purchasing and renewing dog licenses rather than the currently fragmented system.  License fees would increase from $6.50 to $10.00 annually and from $31.50 to $47.00 for lifelong dog licenses.

AGRICULTURE ISSUES in the General Assembly…The Senate Agriculture & Rural Affairs Committee convened a hearing June 13 on the Chronic Wasting Disease (CWD) which could have a devastating effect on the 1,000-plus deer farms in PA… A bill limiting liability to land owners from recreational users passed the House Tourism & Recreational Development Committee June 6 and was referred to the House Rules Committee….Also on June 6, the House passed House Bill 410 (Warner-R-Fayette/Westmoreland) to establish performance-based budgeting in PA.  Advocates say it will force agencies to justify their budget every year rather than ‘coasting’ based on previous budgets.  The vote was divided 115-79…House Bill 187 (Sonney-R-Erie) which allows wind energy easements for protected farms is on the Senate Agriculture & Rural Affairs Committee agenda June 20.  It passed the House May 10 by a 192-4 vote….

CONTROLLED PLANT & NOXIOUS WEED BILL BEING CONSIDERED BY SENATE COMMITTEE

Also on June 20, the Senate committee will take up House Bill 790 (Pashinski-D-Luzerne) regarding the Controlled Plant & Noxious Weed Act.  Among other things, it establishes a system to control weeds that might have economic value such as a biofuel.  Its’ Senate counterpart is Senate Bill 567 (Argall-R-Schuylkill and Schwank-D-Berks).

ASSOCIATION NEWS

  • Wayne Campbell (PA State Grange) was appointed by the Board of Directors to fill the unexpired term of Beth Downey who resigned.
  • The PA Department of Agriculture/PSCFO- sponsored Food Safety Modernization Act (FSMA)/Risk Management workshop June 1 in Tamaqua had two legislators in attendance, Senate Majority Policy Committee Chair Dave Argall (R-Schuylkill) and Rep. Eddie Day Pashinski (D-Luzerne), Minority Chair of the House Agriculture & Rural Affairs Committee.

HOUSE AG COMMITTEE TO CONSIDER TWO BILLS

On June 20, the House Agriculture & Rural Affairs Committee is considering two bills.  House Bill 1518 (Causer-R-McKean/Cameron/Potter) adds two farmers as alternate members of the Agricultural Lands Condemnation Board.  This Board meets to see if there are prudent alternatives to taking farmland for highway purposes.  Currently, there is no provision for the farmer members of the Board to have alternates.  The second bill is House Bill 1550 (Klunk-R-York).  It allows a farmer to choose not to create an additional farmstead residence to reduce the protected farmland value for a tax write-off or make it easier to pass on the farm to the next generation at a lower value.

COMING UP…

  • PA Certified Organic is hosting the 6th annual FarmFest in Centre Hall, PA July 28-19 to celebrate “our state’s rich organic heritage.”  Details: 814-422-0251
  • FARM AID Concert is returning to Pennsylvania September 16 in Burgettstown, PA, about 25 miles north of Pittsburgh. Details: https://www.farmaid.org/concert
  • The PA Fair schedule flyer has been released.  Details: PA Department of Agriculture 717-787-6298 or PA State Association of County Fairs 866-814-6985, www.pafairs.org  Trivia question: What is the longest-running annual fair in the country? It is the Jacktown Fair in Greene County.  The oldest fair in the U.S. is of course the York Fair.

Don’t Miss the March 3 PSCFO Meeting!

Cornucopia 2012 200x167The March 3 Council program will feature both Republican and Democratic Chairs of the House and Senate Agriculture & Rural Affairs Committees to discuss what agricultural issues are likely to come up before the General Assembly.

In addition, PA Agriculture Secretary Russell Redding will present some of the Wolf Administration’s thinking on how PA Agriculture jobs and workforce development are central to Pennsylvania’s total economic well-being.

March 3 is also the day when Governor Wolf presents his State Budget for the fiscal year beginning July 1, 2015 to the General Assembly so expect plenty of buzz about the Department of Agriculture budget.   The PSCFO Board truly hopes you will attend this informative and useful session.

Click here for more information.

PDA Publishes Grant Criteria

PDA Logo - GrantIn the December 6 PA Bulletin, the PA Department of Agriculture published details regarding funding for PA agricultural organizations which conduct agricultural fairs and organizations that contribute to the development of agriculture and agribusinesses as well as eligible agriculture youth groups.  Among those included are horse racing organizations, 4-H, and FFA county organizations.  A link to the Notice follows:

http://www.pabulletin.com/secure/data/vol44/44-49/2509.html

WOTUS Comment Deadline Extended

pa streamThe US Environmental Protection Agency (EPA)/Army Corps of Engineers proposed definition of “Waters of the US” or WOTUS has a new deadline for public comment, November 14.  The PA Department of Agriculture suggested that the proposed rule be withdrawn.

PSCFO did not comment due to the diversity of views within the organization.

There will be an informational panel on the subject at the October 27 Council meeting to contrast some of the positions.  Those seeking to comment should utilize

http://www.regulations.gov/#!submitComment;D=EPA-HQ-OW-2011-0880-0001

Secretary Greig Invites PSCFO to Town Meeting

greig_official-300x250HARRISBURG – On August 14 at 10:00 a.m. in the Red Barn, PDA Secretary Greig has invited members of the Pa. State Council of Farm Organizations to participate in a Town Hall meeting. This will be an open dialogue between the Department and attendees.

Among other things, discussions will include FDA regulations under the Food Safety Modernization Act (FSMA), implementation of the Farm Bill, the PDA Budget for the state fiscal year beginning July 1, 2014, and a host of other regulatory topics.

Other topics of interest to PSCFO members such as the EPA’s proposed water definition and the feral hog issue may also be addressed.

RSVPs are needed because of limited seating.  Ben Junkin 717/787-5789, bejunkin@pa.gov

Ag Progress Days Tours Outlined

Ag Progress DaysROCK SPRINGS – An Ag Progress Days staple are the research tours ranging from habitat for deer and other wildlife to management tactics for high yielding soybeans.

Some other tours include woodlot management, stream (riparian) buffers and native prairie grasses, short rotation woody crops for biomass, Penn State’s Deer Research Center; pasture management, American Chestnut Foundation plantings, etc.

In addition, a tour of the High Tunnel Research & Education Facility demonstrates current production systems and horticultural crops that can be produced in high tunnels.  Complete list of tours is found at http://agsci.psu.edu/apd/events/tours

Walnut Quarantine Posted for Southeast Pennsylvania

Thousand-Cankers-Walnut-w-shadowHARRISBURG – On August 4, the Pa. Department of Agriculture expanded the walnut quarantine for Bucks, Chester, Delaware, Montgomery and Philadelphia counties because of the presence of Thousand Cankers Disease (Geosmithia morbida and Pityophthorus juglandis).

Quarantined Items

This order forbids transport of “nuts, nursery stock, budwood,  scionwood, green lumber, firewood, and other material living, dead, cut, fallen including stumps, roots, branches, mulch and composted and uncomposted chips…” from walnut trees.

Exemptions

The order provides a procedure to request exemptions.  Movement of the above into PA is also prohibited from other states where the disease is present: AZ, CA, CO, ID, IN, MD, NV, NM, NC, OH, OR, TN, UT, VA, and WA unless the plant regulatory agency of the state of origin issues a document certifying that the regulated article is determined to be free of Thousand Cankers Disease.

More information: Dana Rhodes 717/772-5205, danrhodes@pa.gov.

 

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