Yogi Berra’s infamous expression “It’s déjà vu all over again” could apply to the fall return to legislative session. It seems like only yesterday that legislators were scrambling to leave town on the heels of debating a smoking ban, renewable energy issues, healthcare and property taxes and yet those very issues are as tied to the fall session as apple cider and football games. Add to that mix the hot potato issue and investigation into whether or not last year’s bonuses to House staffers were a reward for doing campaign work — an illegal activity — and the fall session should be as lively as the spring session was!

Energy Debate – Taxes versus Credits
Unless you’ve been holed up in a cave without benefit of newspapers, television or radio coverage, you are aware of the major focus both statewide and nationally on the energy crisis and the emphasis on developing alternative energy sources and fuels. Prior to the Legislature’s adjournment for summer recess, additional legislation was under consideration to support Governor Rendell’s Energy Independence Strategy aimed at saving consumers $10 billion in energy costs over the next decade. Since that time, various legislators have worked over the summer to propose alternatives to the Governor’s plan and its proposal to assess a usage tax on all Pennsylvanians to pay for this $850 million program. In mid-September, a House Republican Energy Task Force unveiled its Energy for PA plan to lower energy costs, create jobs and protect our environment. According to Rep. Stan Saylor (R-York), who chairs the task force, the House Republican plan includes tax credits to encourage private investment in energy and conservation projects and relies on existing state revenues to fund the energy plan as opposed to the Governor’s plan which proposes a surcharge on energy usage to create the fund to support his initiatives. The four-part House Republican plan seeks to Conserve More, Save More through exemptions from state sales taxes and tax credits for green buildings and energy-efficient and conservation measures, Leading by Example which encourages the state government to reduce its energy usage by 10 percent by 2010 and to purchase more hybrid vehicles, Self-reliant PA which also provides tax credits and incentives for producing alternative fuels, for planting crops for bio-based fuels and for using solar and geothermal systems, and Enhanced Oversight which would streamline the DEP permitting process expediting energy projects.

Additionally, the House Republicans introduced another program, Energy for Tomorrow, which is also designed to create jobs for the future through the funding of energy-related research at Pennsylvania colleges, tax credits for using clean coal technology, access for energy exploration and harvesting activities on state-owned lands and a loan forgiveness program for engineering students who remain in the Commonwealth after graduation.

From the House Democrats, Rep. Eugene DePasquale (D-York) introduced a package of bills in the special energy session that is designed to give a sales tax exemption for selected solar and energy efficient products, provide grants to homebuyers to help offset closing or down payment costs on houses that meet energy efficient/alternative energy system requirements, and offers tax credits to residences and small businesses that employ designated alternative energy sources for at least 50% of their energy needs.

And also joining the energy fray are the Senate Republicans who have also offered an alternative to the Governor’s $850 million program. Senators Mary Jo White (R-Butler, Clarion), Senate Environmental Resources & Energy Chairperson, and Tommy Tomlinson (R-Bucks) have introduced legislation to establish an Alternative Energy Investment Act which would provide $60 million annually “out of existing revenues to provide grants and loans to projects geared at improving energy supply and efficiency, improved conservation and reduced demand for energy.” This legislation provides a combination of tax credits for investments in alternative energy production projects, funds for financing a $250 million bond issue, and money for home energy efficiency programs. One potential source of funding for this program is the anticipated increase in revenues from the gross receipts tax on electricity. Obviously, a lot of energy will be expended in search of a means to reduce our dependence on foreign oil and to protect our environment from further damage with cleaner, more efficient energy alternatives.

REAP Ready to Sow
Last month the Governor’s Office announced its appointment of Mary Bender, formerly the director of the Bureau of Dog Law, as program director for the newly created Resource Enhancement and Protection program (REAP) within the State Conservation Commission. With the appointment of a program director and the hiring of staff, REAP will move forward with developing programs and procedures for implementing and administering the $10 million tax credit program that rewards pollution-reduction best management practices on Pennsylvania farms. This program is scheduled to begin operations this month. The following excerpt from a press release from Rep. Thomas Creighton (R-Lancaster) details the breakdown of how the credits can be used:
Applicants may receive a tax credit of 25 percent to 75 percent of project costs, depending on the BMP selected. It is important to note that 1) credits are available for personal and corporate income tax, the Capitol Stock and Franchise Tax and Sales and Use Tax; 2) tax credits may be transferred (sold) to other entities; 3) a business or individual may sponsor a project installed by another landowner and receive a tax credit; 4) tax credits may be carried over for a maximum of 15 years by the original applicant; and, 5) tax credits are limited to a maximum of $150,000 per agricultural operation.

More to Good Health Than an Apple a Day
Last month the Rendell administration began a six-week series of listening sessions around the state to discuss health insurance industry reform and highlighting the need to expand insurance coverage to more uninsured Pennsylvanians while lowering costs. The hearings are open to businesses to gather input from them on the problems they have in providing health insurance coverage for their employees, particularly small businesses. Part of the Governor’s “Prescription for Pennsylvania” calls for a “Cover All Pennsylvanians” (CAP) program which collects a surcharge from all employers to pay for the program but reimburses those employers who do provide insurance coverage for their employees. Legislation to mandate this healthcare coverage by initially charging a 3% tax on employee wages was introduced earlier this year and subjected to several public hearings. As one of the Governor’s priority issues, you can expect that this proposal will receive renewed attention in the coming months.

Raw Milk Controversy “Heats Up”
Temperatures are rising over the raw milk issue and the heat is not being generated solely by the pasteurization process. Proponents of raw milk and their detractors offered testimony last month in a public hearing sponsored by the Senate Agriculture and Rural Affairs Committee.

Advocates of raw milk sales and consumption cited examples and personal testimony of individuals whose health conditions were improved by the consumption of raw milk, defined the production and purchase of raw milk as a constitutionally protected right of choice, cited the increase in sales and interest in raw milk and the various dairy products made from it, and suggested that some of the health claims against it were not fully investigated as possibly being caused by another factor. Suggestions were made for amending current regulations to allow co-ops to provide raw milk permits to their members and to expand the sale of raw milk into additional products beyond the milk itself and aged cheese, currently the only raw milk products that can be sold in Pennsylvania.
Critics cited the history of pasteurization and its effectiveness in destroying many food-borne pathogens (Salmonella, e-coli, Campylobacter, and Listeria) which improve health conditions and life expectancy for consumers and generally protect public health and safety.

Secretary Wolff from the Pennsylvania Department of Agriculture described PDA’s responsibility for issuing permits for both pasteurized and raw milk products and the difference between the testing procedures for those permits. Ultimately, PDA’s responsibility is to provide farmers with the best practice information available for minimizing contamination of raw and pasteurized milk in order to protect the health of consumers through a permitting regulatory process and through health inspections. Milk shakes a lot of interest for consumers and producers alike and strikes a raw nerve for both proponents and opponents of raw milk consumption who have not had their last say.

Not in My Backyard
At a hearing sponsored by the House Environmental Resources and Energy Committee in late August, farmers and conservationists had the opportunity to discuss their concerns about damages inflicted on their properties from coal companies drilling for coal bed methane. At issue are the rights of landowners and protection from the damage to crops, land and water supplies that coal bed methane drilling can cause.

Rep. Thomas Yewcic (D-Cambria, Somerset) has introduced legislation that would provide for surface-use agreements for coal bed methane wells to give the property surface owners a recourse for recovering damages while allowing the extraction to proceed. Drillers contend that existing law provides adequate protection for landowners. Pennsylvania courts have ruled that coal methane is a by-product of coal and whoever owns the coal rights also owns the methane. We will continue to monitor the movement of this bill and will support amendatory language that would provide the landowners with the same reimbursement rights for methane drilling as are currently provided for coal extraction activities.

Odds and Ends
Quite a few bills have been introduced since last month’s report covering everything from additional misdemeanor charges for violating the agricultural bio-security law, to establishing a returnable beverage container fund, to providing for overnight camping on State game lands, to revisions to PACENET eligibility, and to establishing a Beginning Educator Support and Training (BEST) Program. However, with such an ambitious fall agenda already on tap, new legislation will not likely get a lot of attention in the upcoming months.