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BILL AS INTRODUCED 2007-2008

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H.213

Introduced by   Committee on Agriculture

Date:

Subject:  Agriculture; interim dairy assistance

Statement of purpose:  This bill proposes to state the long-term legislative goals for agriculture and, in the short term, supplement the price of milk paid to dairy farmers for two months and to extend the interest buy-down program at the Vermont Agricultural Credit Corporation.

AN ACT RELATING TO INTERIM ASSISTANCE TO THE DAIRY INDUSTRY AND THE DEVELOPMENT OF LONG-TERM GOALS FOR A VIABLE AGRICULTURAL SECTOR

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1.  LONG-TERM GOALS

(a)  The general assembly should support programs and policies that foster the development of a diversified agricultural sector that:

(1)  offers farmers an opportunity to sell their products to a marketplace that pays them a reasonable rate of return for their labor and capital investments;

(2)  offers the public nutritious and safe foods;

(3)  produces, markets, and distributes agricultural products in a sustainable manner that conserves energy and the environment;

(4)  fosters on-farm renewable energy production and its infrastructure that maximizes energy conservation and efficiency and limits greenhouse gases;

(5)  enables business opportunities that ensure agriculture continues to be a vibrant sector of our Vermont economy that retains current farmers as well as attracts new and young farmers; and

(6)  provides economic stability to preserve the necessary infrastructure of the agricultural industry.

(b)  The general assembly also recognizes that this act provides only

short-term help for problems caused by ongoing severe structural problems in the industry.  Therefore, the general assembly also recognizes the need to work with the farmers, related industries, and citizens of Vermont to work collaboratively with all parties to support and develop a more robust and

self-sustaining agricultural sector.

Sec. 2.  CURRENT SITUATION

(a)  The general assembly finds that Vermont dairy farmers are currently laboring under the problems caused by the unfavorable weather of the last growing season, the high cost of production, and the low price paid for milk.  Many farms are short of feed, and the quality of the available feed is poor, resulting in lower production.  The prices of many farm supplies, particularly grain and feed, continue to rise.  The price of milk continues to be well below the cost of production.  The accounts receivable of many dealers and suppliers have grown beyond generally accepted financial standards.  The situation for much of the dairy industry is dire and the 2007 rate of attrition of Vermont dairy farmers is anticipated to be two to three times the normal rate. Furthermore, Congressional action on the $54 million federal disaster aid package is uncertain. The general assembly, therefore, adopts this act in order to assist Vermont dairy farmers and their industry in a time of great need, and to help prevent further loss of the industry and its infrastructure which are critical to Vermont’s economy.

(b)  The Vermont agricultural credit corporation was established to assist Vermont farms and maintain their viability.  Currently there are 330 loans, totaling $31.5 million, of which over 90 percent are to dairy operators.  The current loan rate of 5.75 percent is scheduled to increase to 8.25 percent on April 1, 2007. In view of the current situation, the general assembly finds it is necessary to maintain the current interest rate through the remainder of FY2007 and continuing through FY2008.

Sec. 3.  INTERIM DAIRY ASSISTANCE

(a)  The interim dairy assistance will pay the difference between target prices established by the secretary of the agency of agriculture, food and markets and the combined announced Federal Order Statistical Uniform Price for the Middlebury Location plus the amount of the MILCX payment rate on a per-hundredweight basis.  The payment will be paid in March of 2007, based on the amount of milk produced in the previous two months or on the seasonal herd formula pursuant to subsection (f) of this section, using the entire appropriation.

(b)  The agency of agriculture, food and markets will request the Farm Services Agency to provide the production data for dairy producers and assist the agency to administer the assistance.

(c)  Dairy producers will receive a single payment based on pounds of milk produced in January and February 2007 multiplied by the payment rate for the interim dairy assistance as calculated in this section on a per-hundredweight basis.  The payment will be made by the end of March 2007 based on January and February milk production and price data.  Farmers who do not take part in the MILCX program and who wish to receive this interim assistance shall provide the agency of agriculture, food and markets with the appropriate verifiable production evidence by the 12th day of March for the previous two months’ milk production.  Seasonal herds that have no production in the qualifying months would be paid on the monthly production average of the 12 months, including the payment period, as determined by the secretary. Acceptable forms of verifiable production evidence include:  milk marketing payment stubs, bulk tank records, milk handler records, and daily milk marketing records.

(d)  The payment will come as a separate check to dairy producers from the state of Vermont.

(e)  Determination made within the MILCX program on farm ownership will be used for interim dairy assistance.  The following is not considered commercially marketed milk and is ineligible for this assistance:

(1)  Dumped milk that causes bulk load contamination for which a producer receives an insurance indemnity;

(2)  Milk dumped on the farm by order of a state agriculture or health department official.

(f)  When signing up for the assistance, dairy producers will sign an agreement to reimburse the agency of agriculture, food and markets for payments if the producer disperses the herd or reduces herd production by more than 50 percent by July 1, 2007.

(g)  Appeals. Acknowledging that there may be unforeseen emergencies, a three-member appeal board will be appointed by the secretary of agriculture, food and markets to recommend final settlement of any hardship case.

Sec. 4.  ASSISTANCE THROUGH A LOAN BUY-DOWN PROGRAM

The state of Vermont will buy down the interest rate of farm loans at the Vermont agricultural credit corporation for three additional months to continue the program for the entire fiscal year 2007.

Sec. 5.  APPROPRIATIONS

(a)  There is appropriated in fiscal year 2007, the sum of $3.7 million to the department of finance and management to process payments for interim dairy assistance established in this act.

(b)  For the purpose of continuing to provide interest rate support for farm loans, the sum of $212,500.00 is appropriated from the general fund in fiscal year 2007 to the Vermont agricultural credit corporation.

Sec. 6.  32 V.S.A. § 9602 is amended to read:

§ 9602.  TAX ON TRANSFER OF TITLE TO PROPERTY

A tax is hereby imposed upon the transfer by deed of title to property located in this state.  The amount of the tax equals one and one quarter one and one-half percent of the value of the property transferred, or $1.00, whichever is greater, except as follows:

(1)  with respect to the transfer of property to be used for the principal residence of the transferee the tax shall be imposed at the rate of five-tenths of one percent of the first $100,000.00 in value of the property transferred and at the rate of one and one quarter one-quarter percent of the value of the property transferred in excess of $100,000.00.

(2)  with respect to the transfer of property which is enrolled at the time of the transfer in a program under chapter 124 of this title, or is otherwise a working farm at the time of the transfer if not so enrolled, the tax shall be imposed in the amount of five-tenths of one percent on the entire value of the property transferred; provided, however that no part of the property is converted to a use which would subject it to the land use change tax or an obligation to repay property tax benefits under chapter 124 of this title for a period of three years following the date of the transfer, or if it is a working farm which is not enrolled under chapter 124, that the property is not taken out of agricultural production for a period of six years following the date of the transfer.  For the purposes of this subdivision, a working farm shall mean a parcel of land actively used by a farmer, as that term is defined under section subdivision 3752(7) of this title.  If the conditions of this subdivision are breached by the buyer, the buyer shall be obligated to pay the full transfer tax in the amount of one and one-quarter one and one-half percent and this obligation shall run with the land.

(3)  with respect to the transfer to a housing cooperative organized under chapter 7 and whose sole purpose is to provide principal residences for all of its members or shareholders, or to an affordable housing cooperative under chapter 14 of Title 11, of property to be used as the principal residence of a member or shareholder, the tax shall be imposed in the amount of five-tenths of one percent of the first $100,000.00 in value of the residence transferred and at the rate of one and one-quarter percent of the value of the residence transferred in excess of $100,000.00; provided that the homesite leased by the cooperative is used exclusively as the principal residence of a member or shareholder.  If the transferee ceases to be an eligible cooperative at any time during the six years following the date of transfer, the transferee shall then become obligated to pay any reduction in the property transfer tax provided under this subdivision at the rate of one and one-quarter percent of the value of the property transferred, and the obligation to pay the additional tax shall also run with the land.

Sec. 7.  32 V.S.A. § 9602 is amended to read:

§ 9602.  TAX ON TRANSFER OF TITLE TO PROPERTY

A tax is hereby imposed upon the transfer by deed of title to property located in this state.  The amount of the tax equals one and one-half one and one-quarter percent of the value of the property transferred, or $1.00, whichever is greater, except as follows:

(1)  with respect to the transfer of property to be used for the principal residence of the transferee the tax shall be imposed at the rate of five-tenths of one percent of the first $100,000.00 in value of the property transferred and at the rate of one and one-quarter percent of the value of the property transferred in excess of $100,000.00.

(2)  with respect to the transfer of property which is enrolled at the time of the transfer in a program under chapter 124 of this title, or is otherwise a working farm at the time of the transfer if not so enrolled, the tax shall be imposed in the amount of five-tenths of one percent on the entire value of the property transferred; provided, however that no part of the property is converted to a use which would subject it to the land use change tax or an obligation to repay property tax benefits under chapter 124 of this title for a period of three years following the date of the transfer, or if it is a working farm which is not enrolled under chapter 124, that the property is not taken out of agricultural production for a period of six years following the date of the transfer.  For the purposes of this subdivision, a working farm shall mean a parcel of land actively used by a farmer, as that term is defined under subdivision 3752(7) of this title.  If the conditions of this subdivision are breached by the buyer, the buyer shall be obligated to pay the full transfer tax in the amount of one and one-half one and one-quarter percent and this obligation shall run with the land.

(3)  with respect to the transfer to a housing cooperative organized under chapter 7 and whose sole purpose is to provide principal residences for all of its members or shareholders, or to an affordable housing cooperative under chapter 14 of Title 11, of property to be used as the principal residence of a member or shareholder, the tax shall be imposed in the amount of five-tenths of one percent of the first $100,000.00 in value of the residence transferred and at the rate of one and one-quarter percent of the value of the residence transferred in excess of $100,000.00; provided that the homesite leased by the cooperative is used exclusively as the principal residence of a member or shareholder.  If the transferee ceases to be an eligible cooperative at any time during the six years following the date of transfer, the transferee shall then become obligated to pay the property transfer tax at the rate of one and one-quarter percent of the value of the property transferred, and the obligation to pay the additional tax shall also run with the land.

Sec. 8.  Effective Date 

This Sec. and Secs. 1–5 of this act shall take effect on passage; Sec. 6 shall apply to transfers on or after April 1, 2007, but before May 1, 2008; and Sec. 7 shall apply to transfers on or after May 1, 2008.



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us