THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

INTRODUCED BY HANNA, BARRAR, BRENNAN, CARROLL, DePASQUALE, EVERETT, FLECK, KAUFFMAN, KULA, MAHONEY, MELIO, MILLARD, MURT, ROCK AND YOUNGBLOOD, APRIL 22, 2009

REFERRED TO COMMITTEE ON AGRICULTURE AND RURAL AFFAIRS, APRIL 22, 2009  

AN ACT

Establishing the Fair Share Nutrient Reduction Program;

providing funding for wastewater treatment plants and farmers

to meet nutrient reduction mandates; providing for a resource

enhancement and protection tax credit and for supplemental

funding for the Department of Agriculture and the State

Conservation Commission.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  Short title.

This act shall be known and may be cited as the Fair Share

Nutrient Reduction Assistance Program for Farmers Act.

Section 2.  Legislative findings.

The General Assembly finds and declares as follows:

(1)  Federal law mandates that wastewater treatment

facilities and farmers reduce nitrogen and phosphorus

discharges going into Commonwealth streams and rivers.

(2)  In the Chesapeake Bay Watershed alone, 184

wastewater treatment facilities will be required to upgrade

treatment systems at an estimated cost of more than

$1,000,000,000, and the Department of Environmental

Protection has estimated the cost to farmers of complying

with reduction mandates to be nearly $600,000,000.

(3)  In order to meet the mandates, local wastewater

treatment facilities will have to double or triple their cost

of service to ratepayers. Farmers, who cannot pass along

costs through increased prices for farm commodities, will

face crippling increases in operating costs.

(4)  Technical assistance and help choosing and

implementing proper conservation practices on farms from

county conservation districts, the State Conservation

Commission and the Department of Agriculture is vital to the

success of reducing nutrients from agricultural sources.

These government entities have seen cuts in funding in the

past year, at a time when their services are most needed by

farmers.

(5)  One promising tool to reduce the cost of compliance

with these mandates for both wastewater treatment facility

operators and farmers is the Nutrient Credit Trading Program

established by the Department of Environmental Protection.

However, the program currently is not doing all it can to

reduce the risk of participation by wastewater treatment

facility operators and farmers and is not generating the

credits needed to allow for future growth and development.

(6)  Federal and State Government, local wastewater

system ratepayers and farmers must all do their fair share to

finance the costs of new nutrient reduction mandates and

support their successful implementation, because the

environmental and economic benefits of clean water will

accrue to all citizens of this Commonwealth.

Section 3.  Definitions.

The following words and phrases when used in this act shall

have the meanings given to them in this section unless the

context clearly indicates otherwise:

"Agricultural nutrient and sediment reduction project."  A

project undertaken in conjunction with an agricultural operation

to establish, implement or improve a best management practice

recognized by the Environmental Protection Agency or the

Department of Environmental Protection to reduce the levels of

nitrogen, phosphorus or sediment entering surface water or

groundwater from farms in this Commonwealth. The term includes

design, construction, reconstruction, erection, equipping,

expansion, improvement, installation, rehabilitation, renovation

or repair of infrastructure, buildings, structures, equipment

and fixtures to facilitate nutrient or sediment reduction.

"Authority."  The Pennsylvania Infrastructure Investment

Authority.

"Best management practice."  A practice or combination of

practices recognized as effective and practical in the

management or reduction of nutrients or sediment to protect

surface water or groundwater, considering technological,

economic and institutional factors.

"Commission."  The State Conservation Commission.

"Conservation district."  A public body as defined in and

created under the act of May 15, 1945 (P.L.547, No.217), known

as the Conservation District Law.

"Department."  The Department of Environmental Protection of

the Commonwealth.

"NPDES."  The National Pollutant Discharge Elimination System

established under the Federal Water Pollution Control Act (62

Stat. 1155, 33 U.S.C. § 1251 et seq.).

Section 4.  Agricultural Nutrient Reduction Program.

(a)  Establishment.--The Agricultural Nutrient Reduction

Program is established to provide financial assistance in the

form of single-year or multiyear grants or tax credits for

agricultural nutrient and sediment reduction projects and to

provide tax credits for legacy sediment remediation projects in

this Commonwealth.

(b)  Annual transfer to Conservation District Fund.--

(1)  In addition to any appropriations annually made, the

sum of $10,000,000 annually shall be transferred from The

State Stores Fund to the Conservation District Fund under

section 5.

(2)  Money transferred under this subsection shall be

distributed by the commission to conservation districts for

their use in undertaking activities as defined in the act of

May 15, 1945 (P.L.547, No.217), known as the Conservation

District Law. The commission shall adopt criteria and

procedures for the distribution to conservation districts.

(c)  Financial assistance for agricultural nutrient and

sediment reduction projects.--

(1)  For fiscal years 2008-2009 through and including

fiscal year 2012-2013, the sum of $15,000,000 annually shall

be transferred from The State Stores Fund to the Nutrient

Management Fund.

(2)  Money transferred under this subsection shall be

used by the commission for the purpose of awarding grants to

farmers for agricultural nutrient and sediment reduction

projects. Grants to be provided by the commission for any

agricultural nutrient and sediment reduction project shall

not exceed 50% of the cost of the project, except that no

more than $150,000 in total grants may be awarded to a single

agricultural operation.

(d)  Resource enhancement and protection tax credit.--For

fiscal years 2008-2009 through and including fiscal year

2012-2013, not more than $35,000,000 in tax credits annually

shall be made available to eligible applicants in accordance

with the provisions of Article XVII-E of the act of March 4,

1971 (P.L.6, No.2), known as the Tax Reform Code of 1971, for

agricultural nutrient and sediment reduction projects and for

legacy sediment remediation projects. Authorization for tax

credits and the extent and limitation of eligibility, receipt

and transfer of tax credits shall be as provided in Article

XVII-E of the Tax Reform Code of 1971.

(e)  Nutrient reduction aid to farmers.--

(1)  For fiscal years 2008-2009 through and including

fiscal year 2014-2015, the sum of $10,000,000 annually shall

be transferred from The State Stores Fund to the Nutrient

Management Fund.

(2)  The money transferred under this subsection shall be

used by the Department of Agriculture for agricultural

research, agricultural extension and other programs to aid

farmers in complying with nutrient reduction requirements.

(f)  Administrative expenses.--The commission may annually

dedicate not more than $350,000 of funds provided under

subsection (c) for administrative expenses incurred by the

commission in awarding grants and authorizing tax credits under

subsections (c) and (d).

Section 5.  Funding sources.

Programs established under this act shall be funded through

interfund transfers from The State Stores Fund. The Secretary of

the Budget shall transfer from The State Stores Fund to the

funds specified in this act an aggregate amount of $70,000,000

annually for fiscal year 2008-2009 through fiscal year 2012-2013

and $20,000,000 annually for fiscal year 2013-2014 through

fiscal year 2014-2015.

Section 6.  Effective date.

This act shall take effect immediately.