A36-Lancaster Farming, Saturday, May 5,2001
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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