A36-Lancaster Farming, Saturday, May 5,2001 . ,tf ( Oiimu »/ 4 <s* hulltsfn I “** jiy < CLEAN AND GREEN: WHAT YOU DON’T KNOW CAN HURT YOU Guest Columnist John H. Howard, Esquire James Clark & Associates Attorneys At Law Willow Street Owners of Pennsylvania farm land may be able to achieve sig nificant reductions in their real estate taxes through preferential assessment under Act 319, com monly known as “Clean and Green.” Under the Act, agricul tural land is assessed at its cur rent use value for agriculture, which in most cases is much lower than its fair market value. Land in agricultural use must have been producing an agricul tural commodity or have been in a soil conservation program agreement for three years pre ceding the application, and must either be 10 or more contiguous acres, or have an anticipated yearly gross agricultural produc tion income of at least $2,000 from the production of an agri cultural commodity. Landowners wishing to enroll their property for the 2002 tax year must submit an application to their county assessment office by June 1,2001 to be eligible. Clean and Green is good news for most Pennsylvania farmers, but it can also be a trap for the unwary if the application process is not carefully thought out be forehand, or if the rules of the Act are not followed. The Act imposes “rollback taxes,” plus six percent simple interest, for up to the seven previous years if the landowner changes the use of the property or splits off a portion in a way that is not allowed by the regulations. Rollback taxes are the difference between the taxes paid based on the preferential as sessment and the taxes that would have been paid otherwise. For example, a landowner may “split off up to two acres per year (up to a maximum of 10 acres or 10 percent of the proper ty, whichever is less) for a resi dential use. However, if the land owner splits off more than two acres in one year, he is liable for rollback taxes and interest on the entire parent tract that was on the original application. A landowner may also make a “separation” of an enrolled tract into two or more tracts, as long as both tracts still qualify, with out triggering rollback taxes. However, if the owner of either of the separated tracts subse quently changes the use of that tract within seven years of the separation so that it no longer qualifies, the owner who changed the use is liable for rollback taxes and interest on the entire original tract. If the change in use occurs more than seven years after the separation, rollback taxes are only due on the tract on which the use was changed. The Act allows up to two acres of enrolled land to be used for “direct commercial sales of agri culturally related products and activities” without triggering rollback taxes on that land. The Act also provides for other “rural enterprises” that could be per- John H. Howard formed on enrolled land and trig ger rollback taxes on only the area used for the rural enterprise. Again, in either of the above in stances, the landowner must be careful not to exceed the size or use restriction, or he could face rollback taxes on the entire prop erty. Any sale, change in use, separation, split off of Clean and Green Property requires 30 days advance written notification to the county assessment office. Recent changes to Clean and Green by Act 156 of 1998 and the resulting regulations have clarified some questions and made the Act more uniformly fa vorable to farmers across the state. For example, Act 156 pre vents counties from establishing “base acres” with higher assessed values within Clean and Green tracts. It also requires that coun ties assess farm buildings at the value they actually contribute to the farm, not at replacement cost or some other arbitrary value, and eliminates the ability of counties to impose additional re quirements as a condition for en rollment. The new law clarifies that rollback taxes are not trig gered by merely the transfer of property, but rather only if the new owner actually changes the use. It also clarifies that in the case of a split off tract where a new owner changes the use of the split off tract, it is the new owner, not the original owner, who is liable for the rollback taxes and interest that will be as sessed on the entire original property. Clean and Green is a good deal for most Pennsylvania farm ers. Many of the problems and pitfalls mentioned above can be avoided by a thorough under standing of the rules and by care ful planning at the application stage, for instance, by making separate applications for sepa rately deeded tracts in order to minimize the scope of rollback taxes should it be necessary to change the use. If you are unsure whether Clean and Green is right for you, or if you are already en rolled and are thinking of selling all or part of your property, you should seek professional advice before continuing. For more information on Clean and Green, contact John Howard directly at (717) 464-4300 or contact Brent Landis at The Lancaster Chamber at (717) 397-3531, ext. 134 or blan dis@lcci.com Proposed Legislation Would Prohibit Destruction of Research Crops HARRISBURG (Dauphin Co.) To prevent vandalism that can potentially delay impor tant agricultural projects for years, Rep. Raymond Bunt Jr. has introduced legislation mak ing it illegal to intentionally de stroy crops grown for testing or research purposes. “In an effort to advance their agenda, the opponents of agricul tural biotechnology have de stroyed crops involved in private and public research field trials,” said Bunt, who chairs the Penn sylvania House Agriculture and Rural Affairs Committee. “This destruction can set back the timetable of research proj ects, denying people the benefits Soybean Association Cites Need For Biodiesel Fuels SAINT LOUIS, Mo. The American Soybean Association (ASA) presented testimony to Congress recently that proposed a two-pronged approach to sup port biodiesel. ASA is asking that as much as two percent of all motor fuels sold in the United States be required to include ei ther biodiesel or ethanol, and proposing a tax exemption that would make biodiesel more price competitive. “Our initiative would provide the United States with more homegrown energy and help our nations farmers by fostering mar kets for our surplus commodities, such as vegetable oil,” said ASA Executive Committee Member Ron Heck of Perry, lowa, who gave the testimony before the House Agriculture Conservation, Credit, Rural Development and Research Subcommittee. “ASA’s two-part plan supports cleaner burning ftiels for everyone, re duces dependence on foreign en ergy sources and provides a much-needed boost to farm prices and rural economies.” Biodiesel is commonly pro duced from soybean oil, which is currently in surplus and de presses the price of soybeans and other oilseeds. It contains no pe troleum, but it can be blended easily with diesel to offer envi ronmental, energy security and economic development benefits. Penn State Golf Outing The Department of Dairy & Animal Science at Penn State is sponsoring “Tee Times for Tuition” on Tuesday, June 19, a golf outing to bring together groups and individuals for some friendly competition and fun. The goal is to help undergraduate students by using the proceeds from this event to help build the department’s scholarship funds for incoming stu dents. The golf outing includes a continental breakfast, greens fees and cart, and a barbecue in addition to prizes. The deadline for regis tration is May 20. If inter ested in participating, reg istration information is available by calling (814) 865-1362 or e-mailing eeml2@psu.edu and is available at www.das.p su.edu. resulting from crop research, in cluding improved food quality and added economic value for farm families.” “While Pennsylvania so far has avoided crop destruction of this type, research is an impor tant part of our state’s agricul ture industry, which is responsi ble for $44 billion in economic activity. We can’t afford to let our guard down destruction in the name of protest is inappro priate and should not be tolera ted.” Bunt’s legislation consists of two bills. House Bill 1493 adds a section to the state’s crimes code to make it a felony of the second degree to intentionally and Biodiesel is popular in Europe where motorists use 250 million gallons annually. According to the National Biodiesel Board, U.S. biodiesel producers are ex pected to manufacture 20 million gallons in fiscal year 2001, a four-fold increase from last year. Strong public support is essen tial to develop the biodiesel mar ket since U.S. culture and poli cies are focused on petroleum products. Therefore, ASA and the National Corn Growers As sociation are proposing that re newable fuels, such as biodiesel and ethanol, should constitute as much as two percent of the U.S. motor fuel market over the next 10 years. The policy would be part of a flexible and user-friend ly national fuels program that would gradually increase federal renewable fuel content require ments. ASA’s recommendation for a biodiesel tax incentive would provide a partial exemption to the diesel Kiel excise tax similar to the partial tax exemption for ethanol. The amount of the exemption would be three cents for diesel fuel that contains two percent biodiesel. This approach is similar to the partial tax exemption for ethanol, which provides a 5.4 percent exemption for gasoline that contains 10 per cent ethanol. (Biodiesel and etha nol are complementary renewa ble fuels since they are sold in separate fuel markets.) The proposal would boost farm prices and save taxpayer dollars. Every 100 million gallons of biodiesel requires 760 million pounds of a feedstock, such as vegetable oils, recycled grease or animal fats. If soybean oil were the only feedstock used, 100 mil lion gallons of biodiesel would re duce by one-third the current surplus of 2.1 billion pounds of soy oil. Reducing soy oil supplies by this amount would increase the U.S. soy oil price by an esti knowingly damage any field crop grown for personal or commer cial purposes or for research or testing use by a public or private agency. Persons who are con victed may also be sentenced to pay restitution, attorney fees and court costs. House Bill 1492 allows the vic tims of agricultural crop destruc tion to pursue civil remedies to recover the cost of the damaged crops. Damages available would be limited to three times the mar ket value of the crop prior to its damage plus three times the ac tual damages for production re search, testing, replacement and crop development costs. The bills will be reviewed by a House standing committee. mated 1.5 cents per pound. With 11 pounds of soy oil in a bushel of soybeans, this would raise U.S. soybean prices by as much as 16.5 cents per bushel. The proposal would save tax payer dollars because ASA is proposing to reimburse the Fed eral Highway Trust Fund through the U.S. Department of Agricultures Commodity Credit Corporation (CCC). The cost to the CCC would be offset, at least initially, by the savings from in creased biodiesel sales that would reduce government expenditures under the soybean marketing loan program. For example, if 100 million gallons of biodiesel were used under this program, it would be blended at two percent per gallon into five billion gallons of diesel fuel. At a cost of three cents per gallon, the cost of the program would be $l5O million. Reduced soybean oil surpluses will result in higher soybean prices, and raising soybean prices in the marketplace would reduce CCC outlays under the soybean mar keting loan program. Using a conservative 13 cents per bushel impact on price, the cost savings on this years estimated 3.0 billion bushel soybean crop would be $390 million. As a result, the pro posal will save more than two dollars for each dollar it costs. Furthermore, biodiesel users and the public would benefit from the fuels many operational and environmental benefits. In particular, biodiesel can increase the lubricity of diesel, which is of particular benefit when the sul fur content of diesel is reduced. Independent studies also show that the use of biodiesel in con ventional diesel engines results in a substantial reduction of pollu tants, including carbon dioxide. Additional information on the at tributes of biodiesel is available at www.biodiesel.org
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