HCS SS SCS SB 428 -- AGRICULTURE

SPONSOR:  Purgason (Quinn, 7)

COMMITTEE ACTION:  Voted "do pass" by the Committee on
Agriculture Policy by a vote of 9 to 0.

This substitute changes the laws regarding agriculture.

NATIONAL ANIMAL IDENTIFICATION SYSTEM

The Department of Agriculture is prohibited from participating in
any animal identification program that may be required under the
National Animal Identification System administered by the United
States Department of Agriculture mandating participation in
premises registration, animal identification, and animal tracing
without specific authorization from the General Assembly.

AGRICULTURAL OPERATIONS

The Department of Natural Resources is required to establish
rules and regulations regarding the establishment, permitting,
design, construction, operation, and management of voluntarily
regulated concentrated animal feeding operations (CAFOs).  A
voluntarily regulated facility is any CAFO with a capacity of
less than 1,000 animal units that voluntarily applies to the
department to be regulated and which is not otherwise required by
law to have a class II permit.

Any permit issued to a class II facility prior to the effective
date of the substitute will remain in effect, and the facility
will be considered a voluntarily regulated facility.

The substitute establishes the Concentrated Animal Feeding
Operation (CAFO) Review Board and authorizes the board to issue
tax credits equal to 50% of the cost for purchasing and
installing reasonably available odor control technology in class
IB, class IC, or class II CAFOs.  A single tax credit cannot
exceed $100,000, and the cumulative amount of tax credits issued
for this purpose will not exceed $2 million in any one year.  The
tax credit is to be taken by the taxpayer in the year issued but
may be carried forward for three years until the full credit has
been claimed.  The taxpayer may sell, assign, convey, or transfer
the tax credits authorized by the substitute.  No tax credit will
be issued for tax years beginning on or after January 1, 2013.
No public health order, ordinance, rule, or regulation
established by a county commission or county health center board
will apply to any CAFO.  However, an existing order as of the
effective date of the substitute will remain in effect until
certain standards have been established.

The Department of Agriculture is required to establish standards
for managed environment livestock operations that implement odor
control technology and utilize best management practices for the
handling and management of animals and animal manure.  The
department must develop procedures to determine if a CAFO meets
these standards within 30 days of the receipt of a permit
application.

No CAFO or its appurtenances can be considered a nuisance,
private or public, or to trespass by any changed conditions in or
about the locality after the facility has been in operation for
one year.  A CAFO can reasonably expand, diversify, or modernize
if all applicable codes, laws, and regulations are met.  A CAFO
and its appurtenances include any operation used in the
production, processing, or storing for commercial purposes of
crops, livestock, equine, forestry, swine, poultry, livestock
products, swine products, or poultry products.  If any action
alleging a nuisance or trespass is found to be frivolous, the
defendant is to recover his or her costs and expenses, as
determined by the court.  No CAFO can be considered a nuisance,
private or public, or to trespass for conditions associated with
farming-related activities conducted by the CAFO or any of its
appurtenances except whenever it results from negligence.
All class I facilities meeting the standards for managed
environment livestock operations will retain the current
statutory buffer distances.  All class I facilities not meeting
the standards will be subject to the following buffer distances:

(1)  For CAFOs with at least 1,000 animal units, 1,250 feet;

(2)  For CAFOs with between 3,000 and 6,999 animal units, 2,500
feet; and

(3)  For CAFOs with 7,000 or more animal units, 3,750 feet.

All CAFOs in existence prior to the establishment of the rules
required by the substitute will not be subject to the revised
buffer distances; except if it expands into a higher
classification, the revised buffer distances will apply.

If the department, due to certain factors, recommends a reduced
buffer distance, the governing body of the county in which the
CAFO is located has 60 days to reject the recommendation or the
department will adopt the reduced buffer distance.

The department is required, by August 28, 2007, to send a draft
copy of an operating permit for a new class IA CAFO to the
governing body of the county in which the proposed facility is to
be located.  If the governing body rejects the draft operating
permit within 60 days of receipt, the department will not issue a
final permit.  If the governing body does not reject the draft
permit, the draft permit will be issued as the final permit.

The Missouri Clean Water Commission is required to review and
revise design guidelines regarding CAFOs.  Any proposed class II
CAFO with an operating capacity of more than 650 animal units is
required, by August 28, 2007, to obtain a letter of approval from
the department.  The commission is to review and revise, as
necessary, the rules and regulations that must be met in order
for the department to issue a letter of approval.  Class II CAFOs
must be at least 500 feet from any public building or occupied
residence and are subject to neighbor notification requirements.
Class II CAFOs are prohibited from locating within one mile of a
federally owned reservoir or a reservoir regulated by the federal
Energy Regulatory Commission and from applying manure within
one-quarter mile of the reservoirs.  This provision does not
apply to any CAFO in existence prior to the effective date of the
substitute.

The CAFO Review Board will consist of five members including the
directors of the Department of Natural Resources, Department of
Agriculture, Commercial Agriculture Program at the University of
Missouri, and Missouri Association of Counties and a
representative of the agricultural community appointed by the
Governor.  The board is authorized to employ the Missouri
Agricultural and Small Business Development Authority to
implement its duties.

Subject to the board's approval, moneys in the Concentrated
Animal Feeding Operation Indemnity Fund are to be used to offset
the liability of any county to address animal manure spills
associated with class I or class II CAFOs.  Anytime the balance
in the fund is less than $500,000, the state will indemnify the
difference between $500,000 and the fund balance.  Any state
indemnified moneys are to be repaid to the state from moneys
collected according to the statutory requirements of CAFOs in
Section 640.745, RSMo.

LARGE ANIMAL VETERINARY STUDENT LOAN ASSISTANCE

The administration of the Large Animal Veterinary Medicine Loan
Repayment Program is transferred from the Missouri Veterinary
Medical Board to the Department of Agriculture.  The maximum
number of veterinarians to whom loan repayments can be granted
each year is increased from five to six, the required number of
years of service in an area of defined need to satisfy the loan
repayment requirement is reduced from five to four, and the
maximum service loan repayment amount per year is increased from
$10,000 to $20,000.

The Large Animal Veterinary Student Loan Program is established
to provide up to six loans yearly to veterinary students
attending the College of Veterinary Medicine at the University of
Missouri-Columbia.  No student can receive more than $80,000 in
loans.  Veterinary students agreeing to locate their practice in
department-identified, under-served areas of the state will have
certain amounts of their loan principal and interest forgiven.

The department director will appoint an advisory panel to make
recommendations regarding the administration of the programs.
The panel will consist of three licensed veterinarians, the Dean
of the College of Veterinary Medicine, and a public member
representing agricultural interests.

The Large Animal Veterinary Student Loan Payment Fund is created
consisting of appropriations from general revenue and donations.
Moneys in the fund will be used for student loans and
administrative expenses incurred by the department.

AGRICULTURAL TAX CREDITS

The definition of "agricultural tax credits" administered by the
Missouri Agricultural and Small Business Development Authority is
revised to include family farm breeding livestock loan tax
credits created under the Tax Credit Accountability Act of 2004,
and certain types of agricultural production facilities must be
located in Missouri to qualify its producer member for
agricultural tax credits.

AGRI-MISSOURI MARKETING PROGRAM

The substitute renames the Marketing Division within the
Department of Agriculture as the Agriculture Business Development
Division, the Marketing Development Fund as the Agriculture
Business Development Fund, the Missouri Agricultural Products
Marketing Development Fund as the AgriMissouri Fund, and the
Citizens' Advisory Commission as the AgriMissouri Advisory
Commission.

QUALIFIED BIO-MASS

Qualified bio-mass is added to the list of Missouri agricultural
products that can be used in the production of fuel ethanol by
Missouri qualified fuel ethanol producers.  Beginning January 1,
2008, through December 31, 2018, Missouri qualified fuel ethanol
producers producing fuel ethanol from qualified bio-mass will be
eligible to receive grants from the department.  The total amount
of the grants is not to exceed $10 million per year.

STATE AND LOCAL SALES AND USE TAX EXEMPTIONS

A state and local sales and use tax exemption is authorized for
fencing materials, trailers manufactured in Missouri, motor fuel
used for agricultural purposes, machinery and equipment used
solely in forestry, and utilities used for research and
development of agricultural/biotechnology and plant genomics
products.

NOXIOUS WEEDS

The substitute adds spotted knapweed and sericea lespedeza to the
definition of "noxious weed" and specifies that the noxious weed
control laws are applicable to both varieties of weeds.

MISSOURI ALTERNATIVE FUELS COMMISSION

The substitute renames the Missouri Ethanol and Other Renewable
Fuel Sources Commission to the Missouri Alternative Fuels
Commission and expands its membership from seven to nine.  The
two additional members will be appointed by the Governor.  The
five Governor-appointed members must be engaged in the production
or sale of alternative fuels.  The commission will:

(1)  Make recommendations on legislation to facilitate the sale
and distribution of alternative fuels and alternative fuel
vehicles;

(2)  Promote the production and use of alternative fuels;

(3)  Promote the development and use of alternative fuel vehicles
and other related technology;

(4)  Educate consumers about alternative fuels;

(5)  Develop a long-range plan to reduce petroleum fuel use; and

(6)  Report annually to the Governor and General Assembly.

MANAGED ENVIRONMENT LIVESTOCK OPERATION TAX CREDITS

The Missouri Agricultural and Small Business Development
Authority is authorized to issue tax credits to owners of
livestock operations to partially offset certain expenses
incurred for implementing odor abatement best management
practices and systems.  The maximum tax credit amount for
implementing a system necessary to achieve managed environment
livestock operation (MELO) accreditation or improve basic
infrastructure to increase the setback from the property line
will be the lessor of 50% of the eligible expenses or $50,000.
The maximum tax credit amount for implementing a system necessary
to meet preferred environmental practices or improve basic
infrastructure to increase the setback from the property line
will be the lessor of 75% of the eligible expenses or $75,000.
The yearly maximum amount of tax credits issued by the authority
for odor abatement will be $3 million.  The tax credits may be
carried back three years, forward five years, assigned,
transferred, or sold and may be taken against the estimated
quarterly tax or quarterly taxes.

The authority is required to establish rules for tax credit
eligibility based on odor abatement impact, the owner's
prospective use and funding of proven technologies, and other
factors that the authority considers necessary.  Ninety percent
of the tax credits issued in any one year will go to livestock
operation owners for the implementation of best management
practices and systems necessary to achieve MELO accreditation.
Ten percent and any remaining MELO tax credits will be issued to
livestock operation owners for the implementation of preferred
environmental practices.  Any unissued tax credits will not carry
over to the succeeding year.  The authority will impose an
application fee of .25% of the tax credit amount issued.

MISSOURI AGRICULTURAL AND SMALL BUSINESS DEVELOPMENT AUTHORITY

Currently, agricultural tax credits are not to exceed $6 million
in any fiscal year.  The substitute increases the amount to $12
million.

The Missouri Agricultural and Small Business Development
Authority is allowed to issue up to $1 million in agricultural
product utilization tax credits in any fiscal year to individuals
contributing cash funds to the authority.  The funds are to be
used for financial or technical assistance to rural agricultural
business concepts approved by the authority.

Subject to appropriation, the authority must pay the first year
of charged interest payments on all linked deposit loans used for
the acquisition of dairy cows.  The authority is authorized to
charge a service fee, not to exceed $50, to defray the
administrative costs of processing a loan.

The authority is required to develop and implement dairy business
planning grants.  The total amount of the grants will not exceed
$50,000; and no single grant can exceed $5,000.  An application
fee may be charged, not to exceed $50 per grant application, to
defray the administrative costs of administering the grant.

The applicant's dairy operation must be located in Missouri and
at least 51% owned by Missouri residents.  The grant proceeds
must be used solely to contract with a dairy business planning
professional approved by the authority.  The authority is
required to establish rules on eligibility and award criteria
including improved profitability, modernization, and expansion of
the dairy operation.  The experience, education, and relevant
dairy experience of both the grant applicant and the dairy
business planning professional are required to be part of the
respective selection criteria.

MISSOURI QUALIFIED BIODIESEL PRODUCERS

Currently, a biodiesel producer incentive grant is calculated
based on the estimated number of gallons of biodiesel produced
from Missouri agricultural products.  The substitute removes the
instate or Missouri agricultural product origin requirement of at
least 51% Missouri producer owned for a renewable fuel production
facility to be eligible for the grant.

LIQUOR AND WINE TASTING

Wineries, distillers, manufacturers, wholesalers, or brewers are
allowed to provide samples for customer tasting purposes at
retail licensed premises that have a special permit or a by-the-
drink-for-consumption-on-the-premises-where-sold retail license.
The winery, distiller, manufacturer, wholesaler, or brewer cannot
give money or anything of value to the retailer for the
opportunity to conduct the tasting.  Tastings may be conducted
off of retail licensed premises if no sales transactions take
place, but solicitations for later sales via promotional
materials are allowed.

MINING AND GRAVEL EXCAVATION

The substitute allows a property owner, an operator conducting
gravel removal at the request of a property owner, or a political
subdivision who contracts with an operator for excavation to
remove and sell excess gravel without a permit if the primary
purpose for removal is to manage seasonal gravel accretion on
property not used primarily for gravel mining.  Gravel removal
must be conducted from June 1 through March 14, solely on the
property owner's or political subdivision's property and not
within a distance to be determined by the Department of Natural
Resources of any building, structure, highway, road, bridge,
viaduct, or water or sewer line.  Property owners and operators
must follow the departmental guidelines regarding surface mining
and gravel removal.

Property owners are limited to selling 5,000 tons of gravel
annually with a 1,500 ton per-site limitation and are required to
notify the department before any person or operator conducts
gravel removal from his or her property if it is intended to be
sold commercially.  Notification will include the nature of the
activity, the county and stream name in which the site is
located, and the property owner's name.  Any future commercial
gravel mining activities at the site will not require the
property owner to renotify the department.  Any operator
conducting gravel removal at the request of the property owner
who removes more than 5,000 tons of sand and gravel material
within a calendar year must have a watershed management practice
plan approved by the Land Reclamation Commission within the
department.  The application must be accompanied by a $300 fee
and must contain the name of the watershed from which the
operator will be conducting the removal, the location where the
sand and gravel will be removed, and the description of the
vehicles and equipment that will be used for the removal.

Any person filing a complaint with the department for an alleged
violation of the provisions of the substitute must identify
himself or herself by name and telephone number; specify the date
and location of the violation; and provide adequate information
as determined by the department of the violation.  Any records,
statements, or communications submitted by any person to the
department will be confidential and used solely by the department
to investigate the alleged violation.

IMPOUNDMENT OF ANIMALS

Currently, any neglected or abused animal may be impounded.  The
substitute prohibits a farm animal weighing more than 50 pounds
from being impounded until the district state veterinarian of the
Department of Agriculture has determined the animal to be in
imminent danger of loss of life or has determined that the
condition or conditions deemed to be in violation cannot
reasonably be rectified before the disposition hearing.  If an
abused or neglected farm animal in the possession of a caregiver
is impounded, the authority having custody of the animal is
required to make a diligent effort to notify the owner in writing
that the animal has been impounded.

FAMILY FARM LIVESTOCK LOAN PROGRAM

The substitute increases from $150,000 to $1 million the maximum
amount of tax credits that the Missouri Agricultural and Small
Business Development Authority is authorized to issue annually to
eligible lenders participating in the Family Farm Livestock Loan
Program.

QUALIFIED BEEF TAX CREDIT ACT

The substitute establishes the Qualified Beef Tax Credit Act
which authorizes the Missouri Agricultural and Small Business
Development Authority to issue a tax credit certificate in an
amount equal to 10 cents per pound above 450 pounds when
qualified beef cattle are sold and 10 cents per pound if the
weight of the qualified beef at a subsequent sale is greater than
the weight at the previous sale.  The beef cattle must be born in
Missouri after August 28, 2007, must not be breeding stock, and
must have been raised and finished instate to qualify for the tax
credit.  The authority will require submission of an application
for the tax credit including certain information which will be
confidential.

The tax credit must be claimed in the year in which the
qualifying sale occurs; but any unused portion may be carried
back three taxable years, carried forward five taxable years,
assigned, transferred, or sold.  The maximum amount of tax
credits that may be claimed beginning January 1, 2009, and ending
December 31, 2016, is $500,000 in any tax year but cannot exceed
$500,000 in total.

RICE CERTIFICATION ACT

The Rice Certification Act is established which prohibits the
production, transporting, or handling of certain rice varieties
except as provided by the department.

The Rice Certification Committee is established which will
consist of nine members including the department director; three
members appointed by the department director to represent rice
handlers, biotechnology industry, and end rice users; and six
members recommended by the Missouri Rice Research and
Merchandising Council representing rice producers, university
scientists, rice mill operators, and rice seed dealers.  The
committee must:

(1)  Identify rice varieties with characteristics of commercial
impact;

(2)  Develop rules to be established by the department regarding
the production and handling of rice varieties with
characteristics of commercial impact;

(3)  Review rice identity preservation programs;

(4)  Review at least every two years or upon receipt of a
petition from the supplier of the rice each rice variety having
characteristics of commercial impact;

(5)  Review, approve, and make recommendations on any rules and
policies developed by the department relating to rice; and

(6)  Make recommendations to the department director on all
matters regarding the enforcement of the act.

The department is required to establish rules:

(1)  Preventing the contamination of rice that has not been
identified as having characteristics of commercial impact;

(2)  Requiring certain notifications for producers, transporters,
and receivers of rice with characteristics of commercial impact;

(3)  Enforcing restrictions on rice with characteristics of
commercial impact;

(4)  Investigating alleged violations, issuing written notices of
violation, and imposing penalties for violations; and

(5)  Encouraging research and development of new types of rice.

Any person violating a rule established by the department
regarding this act will be subject to a fine between $10,000 and
$100,000 per day per violation.

The provisions concerning the Rice Certification Act become
effective 180 days after the effective date of the substitute.

The provisions of the substitute regarding the state and local
sales and use tax exemption on fencing materials contain an
emergency clause.

FISCAL NOTE:  Estimated Cost on General Revenue Fund of
$1,941,477 to $10,991,477 in FY 2008, $2,649,840 to $17,806,892
in FY 2009, and $2,703,836 to $24,380,639 in FY 2010.  No impact
on Other State Funds in FY 2008, FY 2009, and FY 2010.

PROPONENTS:  Supporters say that if the federal National Animal
Identification System (NAIS)is mandatory, it will not afford
participants any premium pricing because there will be no
distinction for required participation.  Any NAIS program should
to be voluntary, not interfere with private programs, and be
administered at the state level.

Testifying for the bill were Senator Purgason; Ronald Conway;
Lynn Conway; Ray Cunio, Citizens for Private Property Rights;
Doreen Hannes; Missouri Federation of Animal Owners; Russell
Wood, Ozark Property Rights Congress; and Sara Cox.

OPPONENTS:  Those who oppose the bill say that the bill will
disqualify Missouri livestock from interstate and foreign
markets.  The information required by the NAIS program is not
burdensome to producers and proven to be necessary by the hoof
and mouth disease outbreak experienced in Europe.  NAIS provides
countries purchasing meat from the United States with health
assurances that if absent would preclude the purchases from
occurring.  The market dictates the need for the NAIS program not
the government.

Testifying against the bill were Missouri Cattlemens Association;
Anthony Clayton, Clayton Agri-Marketing; Steve Huth; Mike John,
MFA, Incorporated; Missouri Agribusiness Association; Don
Nikodim, Missouri Pork Producers Association; Dave Drennan,
Missouri Dairy Association; and Missouri Farm Bureau.

OTHERS:  Others testifying on the bill say that if Missouri does
not adopt federal directives to control disease, it will lose the
disease-free status currently being enjoyed by producers and
result in extensive disease testing.  NAIS information is
required by World Trade Organization policy, cannot be expunged;
and if not available, disqualifies livestock from export.
Federal funds received by the state for administering the NAIS
program would be lost as well as state control of the program if
the Department of Agriculture is prohibited from participating in
the program.

Testifying on the bill were Missouri Veterinary Medical
Association; Taylor Woods, Acting State Veterinarian; and
Department of Agriculture.

Missouri House of Representatives
94th General Assembly, 1st Regular Session
Last Updated July 25, 2007 at 11:22 am