PRINTER'S NO. 529
No. 492 Session of 1993
INTRODUCED BY WENGER, MUSTO, DAWIDA, MADIGAN, JUBELIRER,
SCHWARTZ, CORMAN, HELFRICK AND PETERSON, FEBRUARY 19, 1993
REFERRED TO AGRICULTURE AND RURAL AFFAIRS, FEBRUARY 19, 1993
AN ACT
1 Establishing a program for sustainable agriculture and the Board
2 of Sustainable Agriculture; defining the powers and duties of
3 the Department of Agriculture and the Board of Sustainable
4 Agriculture; providing for sustainable agriculture loan and
5 grant programs; and making an appropriation.
6 TABLE OF CONTENTS
7 Section 1. Short title.
8 Section 2. Legislative findings.
9 Section 3. Definitions.
10 Section 4. Sustainable agriculture program.
11 Section 5. Duties of executive director of board.
12 Section 6. Board of Sustainable Agriculture.
13 Section 7. Sustainable Agriculture Fund.
14 Section 8. Loan program.
15 Section 9. Revolving loan account.
16 Section 10. Eligibility for loans and limitations.
17 Section 11. Award of loans.
18 Section 12. Grant programs.
19 Section 13. Eligibility for grants and limitations.
1 Section 14. Award of grants.
2 Section 15. Rules and regulations.
3 Section 16. Acceptance of gifts and grants.
4 Section 17. Appropriation.
5 Section 18. Effective date.
6 The General Assembly of the Commonwealth of Pennsylvania
7 hereby enacts as follows:
8 Section 1. Short title.
9 This act shall be known and may be cited as the Sustainable
10 Agriculture Act.
11 Section 2. Legislative findings.
12 The General Assembly finds and declares as follows:
13 (1) Funding is needed to promote sustainable agriculture
14 in this Commonwealth.
15 (2) The practice of sustainable agriculture is intended
16 to offer the farmer the greatest return on his labor and
17 capital by reducing operating expenses while enhancing the
18 value of the end product.
19 (3) Sustainable agriculture emphasizes the practice of
20 an agriculture that is ecologically beneficial, that would
21 improve and ensure the quality of soil and water for future
22 generations and, at the same time, that would enable the
23 farmer to earn a livelihood consistent with his capital
24 investment and labor.
25 (4) Sustainable agriculture emphasizes farm practices
26 that make the best use of on-farm labor and resources to
27 reduce or eliminate the need for the purchase of off-farm
28 inputs.
29 Section 3. Definitions.
30 The following words and phrases when used in this act shall
19930S0492B0529 - 2 -
1 have the meanings given to them in this section unless the
2 context clearly indicates otherwise:
3 "Agricultural activity" or "farming." The commercial
4 production of agricultural crops, livestock or livestock
5 products, poultry products, milk or dairy products or fruits and
6 other horticultural products.
7 "Alternative crop." Crops not normally grown on an annual or
8 rotational basis in this Commonwealth. The term may include
9 crops used to replenish soil nutrients, crops used for animal or
10 human consumption or crops used to reduce reliance on fuel,
11 agricultural chemicals or synthetic fertilizer.
12 "Board." The Board of Sustainable Agriculture.
13 "Corporate farm." A corporation formed for the purpose of
14 engaging in agricultural activity or farming which is not a
15 family farm corporation.
16 "Department." The Department of Agriculture of the
17 Commonwealth.
18 "Family farm corporation." A corporation formed for the
19 purpose of farming in which the majority of the voting stock is
20 held by and the majority of the stockholders are natural
21 persons, or their spouses or other persons related to the
22 natural persons or their spouses and at least one of the
23 majority stockholders is residing on or actively operating or
24 managing the farm and none of the stockholders of which are
25 corporations.
26 "Family farm partnership." A general partnership entered
27 into for the purpose of farming, having no more than three
28 unrelated members and having at least one member residing on or
29 actively operating or managing the farm.
30 "Farm enterprise." A natural person, family farm
19930S0492B0529 - 3 -
1 corporation, family farm partnership engaged in farming or a
2 corporate farm or nonprofit educational organization.
3 "Farmland." Land in this Commonwealth that is capable of
4 supporting the commercial production of agricultural crops,
5 livestock or livestock products, poultry products, milk or dairy
6 products, fruit or other horticultural products.
7 "Fund." The Sustainable Agriculture Fund.
8 "Secretary." The Secretary of Agriculture of the
9 Commonwealth.
10 "Sustainable agriculture." An integrated system of plant and
11 animal production practices having a site-specific application
12 that will, over the long term:
13 (1) Satisfy human food and fiber needs.
14 (2) Enhance environmental quality and the natural
15 resource base upon which the agricultural economy depends.
16 (3) Make the most efficient use of nonrenewable
17 resources and on-farm resources and integrate, where
18 appropriate, natural biological cycles and controls.
19 (4) Sustain the economic viability of farm operations.
20 (5) Enhance the quality of life for farmers and society
21 as a whole.
22 Section 4. Sustainable agriculture program.
23 (a) Establishment.--The department is hereby directed to
24 establish a program to promote the practice of sustainable
25 agriculture.
26 (b) Duties of department.--The department shall:
27 (1) Make sustainable agriculture part of a policy to
28 invigorate the farm economy, increase farm income and
29 conserve natural resources.
30 (2) Encourage public and private institutions, including
19930S0492B0529 - 4 -
1 the various State universities in this Commonwealth, to
2 identify and develop sustainable agriculture practices.
3 (3) Distribute funds appropriated by the General
4 Assembly and received from other sources for loan and grant
5 programs.
6 (4) Provide a clearinghouse of sustainable agriculture
7 information.
8 (5) Disseminate information concerning sustainable
9 agriculture practices, including the results of research
10 projects funded by the sustainable agriculture loan and grant
11 programs.
12 (6) Administer the loan and grant programs and issue
13 loans and grants from the funds appropriated by the General
14 Assembly and awarded by the board.
15 (7) Appoint an executive director to advise the board.
16 The executive director may be drawn from the department's
17 current staff and may use the services of other departmental
18 employees, as directed by the secretary.
19 Section 5. Duties of executive director of board.
20 The executive director shall:
21 (1) Evaluate loan and grant applications submitted to
22 the board.
23 (2) Identify agricultural practices that maintain
24 productivity and minimize environmental and farmland
25 degradation.
26 (3) Integrate and coordinate field experiments and on-
27 farm research and educational efforts of cooperating
28 individuals, agencies, institutions and organizations.
29 (4) Develop an information system, utilizing the
30 expertise of experienced farmers and agencies, institutional
19930S0492B0529 - 5 -
1 and agribusiness specialists, that offers farmers practical
2 advice, addresses farmers' specific questions and refers
3 farmers to other experts in the field.
4 (5) Cooperate with The Pennsylvania State University in
5 promoting sustainable agriculture practices.
6 Section 6. Board of Sustainable Agriculture.
7 (a) Establishment.--There is hereby established the Board of
8 Sustainable Agriculture to review grant and loan applications
9 and issue loans and grants in accordance with the general
10 considerations and eligibility criteria set forth in this act.
11 (b) Composition.--The board shall be composed of the
12 chairman and minority chairman of the Agriculture and Rural
13 Affairs Committee of the Senate, or their designees; the
14 chairman and the minority chairman of the Agriculture and Rural
15 Affairs Committee of the House of Representatives, or their
16 designees. In addition, the board will include the following
17 members appointed by the Secretary of Agriculture:
18 (1) The Secretary of Agriculture, or his designee, who
19 shall serve as chairman.
20 (2) One Commonwealth lender with agricultural
21 experience.
22 (3) One representative from the Penn State Extension
23 Service.
24 (4) One Commonwealth resident from an organization that
25 conducts agriculture research and promotes sustainable
26 agriculture.
27 (5) One Commonwealth resident from an organic crop
28 certification organization.
29 (6) Two Commonwealth resident farmers who use
30 sustainable agriculture methods.
19930S0492B0529 - 6 -
1 (7) One representative from the agribusiness industry.
2 (8) One agronomist.
3 (9) Three Commonwealth residents from Statewide
4 agricultural associations representing farmers.
5 (c) Quorum.--A majority of the members appointed to the
6 board shall constitute a quorum for purposes of conducting
7 meetings and official actions pursuant to authority given to the
8 board under this act.
9 (d) Expenses of board members.--The members of the board
10 shall not be entitled to compensation for their services as
11 members, but shall be entitled to reimbursement for all
12 necessary expenses incurred in connection with the performance
13 of their duties as members of the board.
14 (e) Powers of board.--The board shall have the power to
15 review and accept or reject loan and grant applications.
16 (f) Application of member.--A member of the board may apply
17 for a loan or grant provided all decisions regarding the loan or
18 grant application are subject to the provisions of section 3(j)
19 of the act of October 4, 1978 (P.L.883, No.170), referred to as
20 the Public Official and Employee Ethics Law.
21 Section 7. Sustainable Agriculture Fund.
22 The fund shall receive all revenues and appropriations and
23 pay all costs, except administrative expenses, related to the
24 sustainable agriculture program.
25 Section 8. Loan program.
26 The department shall establish a sustainable agriculture loan
27 program to provide loans that enable farmers to adopt practices
28 that emphasize sustainable agriculture in this Commonwealth.
29 Section 9. Revolving loan account.
30 There is hereby created within the fund a revolving loan
19930S0492B0529 - 7 -
1 account to be funded by appropriations made by the General
2 Assembly and interest earned on the account and interest from
3 loan repayment.
4 Section 10. Eligibility for loans and limitations.
5 (a) Applicant eligibility criteria.--To be eligible for a
6 sustainable agriculture loan, an applicant must demonstrate all
7 of the following:
8 (1) That the applicant is a resident of this
9 Commonwealth or that its principal operating or managing
10 members or shareholders, in the case of either a family farm
11 partnership or a family farm corporation, are Commonwealth
12 residents or show sufficient evidence that he or they intend
13 to become a resident or residents.
14 (2) That the applicant will use the proceeds of the loan
15 for eligible sustainable agriculture purposes, as defined by
16 this act, and that the farmland or farm enterprise for which
17 the loan is acquired is located in this Commonwealth.
18 Corporate farm applicants must demonstrate that the farming
19 enterprise owns or leases farmland in this Commonwealth and
20 that the proceeds of the loan will be used for sustainable
21 agricultural purposes in Commonwealth farming operations
22 only.
23 (3) That the applicant is creditworthy based on the
24 applicant's net worth, cash flow projections, credit rating
25 and the type of farmland or farm enterprise involved.
26 (b) Loan eligibility criteria.--Applications for sustainable
27 agriculture loans shall be reviewed and ranked using the
28 following criteria:
29 (1) The ability of the applicant to meet and satisfy all
30 debt service as it becomes due and payable.
19930S0492B0529 - 8 -
1 (2) The relevant criminal and credit history and ratings
2 of the applicant as determined from credit reporting services
3 and other sources.
4 (3) The payment to date of all tax obligations due and
5 owing by the applicant to the Commonwealth or any political
6 subdivisions thereof.
7 (4) The manner in which loan proceeds will be utilized
8 in furthering sustainable agriculture in this Commonwealth.
9 (5) The amount of the loan.
10 (6) The intent to use practices that would improve soil
11 fertility, lower the cost of production, cause the optimum
12 and environmentally compatible use of off-farm inputs, such
13 as chemical or synthetic fertilizers, insecticides and
14 herbicides, or otherwise promote sustainable agriculture.
15 Practices that promote sustainable agriculture could include,
16 but not be limited to, practices that involve using on-farm
17 labor and resources, such as animal and plant manure to
18 enrich soil, planting a diverse array of crops, rotating
19 crops, planting cover crops to defend against insects and
20 weeds and using mechanical tillage to control weeds and
21 relying on natural systems, such as biological controls and
22 natural predators.
23 (c) Loan limitations.--Loans may not exceed $15,000 for farm
24 enterprises or $25,000 for corporate farms. The loan repayment
25 period shall be based on the stated purpose for the loan, the
26 amount of the loan and the nature of the farmland or farming
27 enterprise involved, but in no event shall the repayment period
28 exceed seven years. Interest on the loans shall be calculated
29 using simple interest at the percentage rate that was equal to
30 the Federal Reserve discount rate at the time the loan was made.
19930S0492B0529 - 9 -
1 Section 11. Award of loans.
2 (a) Form of application.--Applications for loans shall be
3 made to the board on the form and in the manner it prescribes.
4 (b) Review of application.--Properly submitted and
5 documented applications shall be forwarded to the board. The
6 executive director shall review, evaluate and submit loan
7 applications to the board. The board shall approve, approve with
8 special conditions or reject applications on the basis of
9 applicant and loan eligibility criteria and general
10 considerations.
11 (c) Award of loans.--The department shall award loans to
12 applicants according to the decision of the board.
13 Section 12. Grant programs.
14 The department shall establish the following grant programs:
15 (1) A sustainable agriculture grant program to provide
16 grants that enable farmers and nonprofit educational
17 organizations to adopt practices that emphasize sustainable
18 agriculture in this Commonwealth.
19 (2) An alternative crop grant program to provide grants
20 that enable farmers and nonprofit educational organizations
21 to adopt practices that emphasize the use of alternative
22 crops and sustainable agriculture in this Commonwealth.
23 Section 13. Eligibility for grants and limitations.
24 (a) Applicant eligibility criteria.--To be eligible for a
25 grant under this act, an applicant must demonstrate:
26 (1) That he is a resident of this Commonwealth, that its
27 principal operating or managing members or shareholders, in
28 the case of either a family farm partnership or a family farm
29 corporation, are Commonwealth residents or show sufficient
30 evidence that he or they intend to become a resident or
19930S0492B0529 - 10 -
1 residents or that they are a nonprofit educational
2 organization operating within this Commonwealth.
3 (2) That the applicant will use the grant for eligible
4 purposes, as defined in this act.
5 (3) That the farmland or farm enterprise for which the
6 grant is acquired is located in this Commonwealth.
7 (b) Grant eligibility criteria.--Applications for grants
8 under this act shall be reviewed and ranked using the following
9 criteria:
10 (1) The ability of the applicant to meet and satisfy all
11 outstanding debt service incurred as it becomes due and
12 payable.
13 (2) The relevant criminal and credit history and ratings
14 of the applicant as determined from credit reporting services
15 and other sources.
16 (3) The payment to date of all tax obligations due and
17 owing by the applicant to the Commonwealth or any political
18 subdivisions thereof.
19 (4) The manner in which grant proceeds will be utilized
20 in this Commonwealth.
21 (5) The amount of the grant.
22 (6) The environmental benefit.
23 (7) Farm profitability.
24 (8) The applicability of the techniques or technology to
25 other farm enterprises.
26 (9) The effectiveness of the project as a demonstration,
27 where applicable.
28 (10) The intent to use practices that would improve soil
29 fertility, lower the cost of production, cause the optimum
30 and environmentally compatible use of off-farm inputs, such
19930S0492B0529 - 11 -
1 as chemical or synthetic fertilizers, insecticides and
2 herbicides, or otherwise promote sustainable agriculture.
3 Practices that promote sustainable agriculture could include,
4 but not be limited to, practices that involve using on-farm
5 labor and resources, such as animal and plant manure to
6 enrich soil, planting a diverse array of crops, rotating
7 crops, planting cover crops to defend against insects and
8 weeds and using mechanical tillage to control weeds and
9 relying on natural systems, such as biological controls and
10 natural predators.
11 (c) Grant limitations.--Grants may not exceed $25,000 except
12 as provided in this subsection. An additional amount of up to
13 $25,000 may be granted if the grantee matches that additional
14 amount dollar for dollar, so that an individual grant may not
15 exceed $50,000 in one calendar year.
16 Section 14. Award of grants.
17 (a) Form of application.--Applications for grants shall be
18 made to the board on the form and in the manner it prescribes.
19 (b) Review of application.--Properly submitted and
20 documented applications shall be forwarded to the board. The
21 executive director shall review, evaluate and submit grant
22 applications to the board. The board shall approve, approve with
23 special conditions or reject applications on the basis of
24 applicant eligibility criteria, grant eligibility criteria and
25 general considerations. The board may exercise its judgment in
26 selecting applicants for grants and in determining the amount of
27 each grant so that the widest practicable distribution of funds
28 is achieved and the widest possible audience is acquainted with
29 the principles of sustainable agriculture.
30 (c) Grant awards.--The department shall issue grants to
19930S0492B0529 - 12 -
1 applicants according to the decision of the board.
2 Section 15. Rules and regulations.
3 The department shall have the following powers and duties:
4 (1) To adopt rules and regulations under this act.
5 (2) To promulgate, adopt, publish and use guidelines for
6 the implementation of this act for a period of one year
7 immediately following the effective date of this act pending
8 adoption of final rules and regulations. Guidelines proposed
9 under the authority of this section shall be subject to
10 review by the General Counsel and the Attorney General in the
11 manner provided for the review of proposed rules and
12 regulations pursuant to the act of October 15, 1980 (P.L.950,
13 No.164), known as the Commonwealth Attorneys Act, but shall
14 not be subject to review pursuant to the act of June 25, 1982
15 (P.L.633, No.181), known as the Regulatory Review Act.
16 Section 16. Acceptance of gifts and grants.
17 The fund may receive gifts, grants, bequests or devices from
18 any source, including funds from the Federal Government and the
19 State government.
20 Section 17. Appropriation.
21 (a) General rule.--The sum of $1,600,000, or as much thereof
22 as may be necessary, is hereby appropriated for deposit in the
23 fund.
24 (b) Allocation.--The appropriation shall be allocated as
25 follows: $100,000 shall be allocated to administration; $300,000
26 shall be allocated to sustainable agricultural grants; $200,000
27 shall be allocated to alternative crop grants; and $1,000,000
28 shall be allocated to loans.
29 Section 18. Effective date.
30 This act shall take effect in 60 days.
L4L03JLW/19930S0492B0529 - 13 -