HARRISBURG– Secretary Russell Redding has announced the availability of $13 million in tax credits to Pennsylvania farmers for measures to improve soil and water quality. Tax credits through Pennsylvania’s innovative conservation financing program, Resource Enhancement and Protection (REAP), can be combined with other state funding, including the Environmental Quality Incentive Program, the Chesapeake Bay Program or Conservation Excellence Grants.
“Farmers have led the way, investing heavily in cleaner water and productive soil to sustain us in the future,” said Agriculture Secretary Russell Redding. “REAP tax credits are just one of many ways Pennsylvania invests in our farmers’ efforts to grow a sustainable farm economy to feed our future.”
The department is now accepting applications for REAP tax credits from agricultural producers who implement best management practices or purchase equipment to reduce nutrient and sediment runoff, enhancing soil and improving the quality of Pennsylvania’s waterways.
This is the fourth year of increased funding and expanded eligibility for the program under the PA Farm Bill. Farmers may receive up to $250,000 in any seven-year period, and spouses filling jointly can use REAP Tax Credits.
Examples of funded projects include no-till planting and precision ag equipment, waste storage facilities, conservation plans, Nutrient Management Plans. Measures that limit run-off from high animal-traffic areas like barnyards, as well as cover crops and riparian stream buffers that prevent erosion and keep nutrients out of streams are also common REAP-eligible practices.
Farmers may receive REAP tax credits of 50 to 75 percent of the project’s eligible out-of-pocket costs. Farmers whose operation is in a watershed with an EPA-mandated Total Maximum Daily Load (TMDL) can receive REAP tax credits of 90 percent of out-of-pocket costs for some projects.
REAP applications are reviewed on a first-come, first-served basis. Baseline eligibility includes compliance with the PA Clean Streams Law and the Pennsylvania Nutrient and Odor Management Law.
Private investors may act as project sponsors by providing capital in exchange for tax credits, which allows farmers to receive funds quicker and increases lenders’ confidence. Any individual or business subject to taxation by Pennsylvania through personal income tax, corporate net income tax, the bank shares tax or others is eligible to participate in REAP.
Since the program began in 2007, REAP has awarded $129 million in tax credits to more than 8,000 projects. Improvements from these projects have kept more than six million pounds of nitrogen, 275,000 pounds of phosphorus, and 275,000 tons of sediment out of Pennsylvania streams and rivers and the waterways they feed. Private investments in REAP have also contributed to the conservation projects, which in total are worth $350 million.