THE OFFICIAL PUBLICATION OF THE KANSAS AGRIBUSINESS RETAILERS ASSOCIATION
THE KANSAS
AGRIBUSINESS
UPDATE
IN THIS ISSUE: EPA Announces Revisions to Risk Management Program Fertilizer Regulations Agricultural Chemical Remediation Reimbursement Program: Update KARA Testifies Before Governor’s Blue Ribbon Funding Task Force on Water Resource Management
SPRING 2016
U.S. won’t appeal court rulings on lesser prairie chicken Photo of potash taken on the Retailers Live! Tour hosted by the Asmark Institute
Save the Date
November 16-17, 2016 Century II Convention Center &
Ron Seeber Senior VP of Government Affairs Stephanie Jensen Senior VP and Chief Financial Officer Randy Stookey Vice President and General Counsel Shari Bennett Vice President of Event Planning
Clark Pearson Vice Chairman Miller Elevator Inc. Lance Nelson 2nd Vice Chairman Alliance Ag & Grain, LLC Mike Shirley Immediate Past Chairman United Suppliers
Devon Stewart Marketing and Communications Specialist
Covering the Bases Kansas Agri Business Expo
Sam Tenpenny Director of Member Services Lisa Anschutz Senior Director of Internal Operations Julie Stueve Executive Assistant to the President
Scott Anderson
KFSA
Dustin Kuntz Harveyville Seed Co. Inc.
Brian Bucl Crop Production Services
Roger Long Rosen’s Inc.
Troy Coon Gavilon
Brian Norton Syngenta
Roger Cunningham Beachner Grain
Johnny Schaben, Golden Valley, Inc.
Kevin Dieckmann United Suppliers
Larry Shivers Verdesian Life Sciences
Justin Foss Performance Ag
Tim Stoehr Wilbur-Ellis Co.
Tim Giesick Garden City Coop
Kevin Tomka Dow AgroSciences
Jim Grilliot Midwest Laboratories Inc.
Mark Wegner ADM Wholesale Fertilizer
Jon Ingebretson CGB Fertilizer
Dave Wilcox Farmway Coop
Kirk Kennedy Valley Coop Inc.
Craig Zwick B.Z. Bee
2016-2017 KARA SCHOLARSHIP WINNERS: Keren Duerksen, Newton Kaitlyn Dinges, Ness City Brandon Pechanec, Manhattan
SPRING 2016 - THE KANSAS AGRIBUSINESS UPDATE
Hyatt Regency Hotel, Wichita
Kevin Brady Chairman Lang Diesel Inc.
Tom Tunnell President & CEO
Nicole Sudbeck, Seneca
Registration Coming This Summer www.ksabe.org
Samanth L’Ecuyer, Morrowville To learn more about our scholarship program, please visit: https://www.ksagretailers.org/about/scholarship-program/
2
EPA Announces Revisions to Risk Management Program Fertilizer Regulations
The RMP regulations require facilities to develop and implement a risk management program for hazardous chemicals covered by the regulations. The proposed revisions are a key action item under President Obama’s Executive Order 13650: Improving Chemical Facility Safety and Security. The proposal would (a) require additional accident prevention requirements, (b) strengthen emergency response obligations, and (c) enhance public information availability. A final regulation will likely be adopted by the fall of this year. Comments on the proposed rule will be accepted until May 13, 2016. Accident Prevention Requirements: • Current rules regarding incident investigation require an analysis of factors that contributed to the incident. EPA seeks to expand this analysis for Program 2 or 3 processes to conduct root cause analysis for catastrophic releases or incidents that could have reasonably resulted in a catastrophic release. • For facilities that experience a reportable release, EPA proposes to require a post-incident compliance audit performed by an independent third-party. Current rules allow for the audit to be conducted by an internal
representative of the facility’s owner or operator. • For Program 3 regulated processes in certain SIC codes, EPA proposes a new element to the process hazard analysis (PHA) obligating affected facilities to conduct safer technology and alternatives analysis (STAA) as part of their PHA, and to evaluate the feasibility of inherently safer technology (IST). Emergency Response Obligations: • EPA proposes that facilities with Program 2 or 3 processes must coordinate with local emergency response agencies at least once a year, with the intent that such coordination will ensure that resources and capabilities are in place to respond to an accidental release. • Facilities with Program 2 or 3 processes would be required to conduct notification exercises annually. This is intended to ensure that emergency contact information is accurate and complete. • Facilities subject to subpart E of the RMP rules (emergency response program for “responding facilities”) would be required to conduct a field exercise at least once every five years, and a tabletop exercise annually in other years. Also, any responding facility with a reportable accident would need to conduct a full field exercise within a year of the accident. Availability Of Public Information: • The proposed rule would require all regulated facilities to make certain basic information available to the public.
• Certain facilities would be obligated to provide additional information, upon request, to the Local Emergency Planning Committee (LEPC), Tribal Emergency Planning Committee (TEPC) or other local emergency response agencies, including, summaries relate to: (a) compliance audits (facilities with Program 2 and Program 3 processes); (b) emergency response exercises (facilities with Program 2 and Program 3 processes); (c) accident history and investigation reports (all facilities that have had RMP reportable accidents); and (d) any ISTs implemented at the facility (a subset of Program 3 processes). • Any facility suffering a reportable accident would be required to hold a timely public meeting with the local community. Listed Hazardous Substances: The proposed rule does not add any additional hazardous substances. In addition, the proposed rule does not include any changes to EPA’s regulations that govern siting of chemical facilities and requirements for buffers or setbacks. KARA staff reviewed the proposed rule and worked with KARA members, other state associations, and national allied organizations on drafting and submitting a coordinated message to EPA about the effects of the proposed rule on our industry. To read all comments on the proposed rule, go to www.regulations.gov and earch for Docket No. EPA-HQOEM-2015-0725-0001.
T.A.L. Class Completes Session I The 2016 Tomorrow’s Agribusiness Leaders Class traveled to Topeka for two days and completed Session I. During these meetings they learned of many challenges facing the state, our top leader’s plans to move Kansas forward, and what they hoped to accomplish this legislative session. They received staff briefings on the legislative process and the roles and history of KGFA and KARA. During the session, the T.A.L. class enjoyed a detailed policy briefing and a private breakfast with Attorney General Derek Schmidt. The class then met with Associated Press Bureau John Hanna, on how to accurately communicate a message to the press. They also had a working lunch with Deputy Secretary of Agriculture Chad Bontrager and were updated on the many functions the agency plays. Finally, they received training on effective lobbying methods and put those practices to good use during Legislative Action Day on the 27th. The 2016 class showed astute talent in communicating the association’s message to the Legislature and we anticipate that they will continue to excel during future T.A.L. sessions.
KARA
The 2016 T.A.L. class attending session I:
Christopher Stevens, Farmers Coop Grain Assn., Conway Springs Samantha Tenpenny, ADM Fertilizer, Overland Park Derrick Tice, Innvictis, St. Francis Kristin Williams, Randall Farmers Coop Union, Randall
KGFA Matt Case, Farmer’s Cooperative Assn., Baxter Springs Blake Connelly, Southern Plains Cooperative, Lewis Tatum Couture, AgMark, LLC, Beloit Valarie LaPean, Cargill, Overland Park Barbara Padgett, Pride Ag Resources, Dodge City
SPRING 2016 - THE KANSAS AGRIBUSINESS UPDATE
SPRING 2016 - THE KANSAS AGRIBUSINESS UPDATE 3
On March 14, 2016, the U.S. Environmental Protection Agency (USEPA) published proposed amendments to its Risk Management Program (RMP) regulations. These regulations, at 40 C.F.R. Part 68, are otherwise known as USEPA’s Accidental Release Prevention regulations under section 112(r) of the Clean Air Act.
The next T.A.L. session is in July and entails traveling to Washington DC and meeting with our Congressman, industry leaders, and other officials. The T.A.L. class will sneak in a little sightseeing as well. If you or one of your association colleagues are interested in applying for this premier agribusiness leadership program, applications are being taken for the 2017 class at www.ksagretailers.org or www.ksgrainandfeed.org.
4
Summary of FMCSA’s Final Rule to Mandate Electronic Logging Devices
The following is a summary of the final rule’s main points: • FMCSA will allow fleets and drivers using “ELD-like” devices meeting the current standards for automatic on-board recording devices (see 49 CFR 395.15) to continue to use such devices until December 2019, two years after the final deadline for adoption of ELDs. If these devices can be modified to meet the ELD specifications (e.g., with a software upgrade) they may continue to be used after December 2019. • Limited exceptions to the ELD mandate include drivers who use paper logs for no more than eight days during any 30-day period; drivers who conduct drive away-tow away operations, where the vehicle is the product being delivered; drivers of vehicles manufactured before model year 2000 (due to vehicle connectivity concerns; this is a change from the proposed rule); and drivers who operate using the logbook timecard exception (i.e. short haul 100 air mile drivers). • Drivers who are not required to complete logs because of meeting one of the short-haul exemptions in section 395.1(e) of the FMCSA, are not required to use ELDs. Drivers who occasionally don’t meet the conditions of these exemptions are required to keep a paper log in those instances. Drivers who find themselves in these circumstances more than eight days in any 30-day period are required to use ELDs. • ELDs are required to record vehicle location at every change of duty status and at a minimum of 60-minute intervals. To protect driver privacy, required information reported to enforcement officials from the devices will be limited to recorded location during on-duty time at a precision of approximately one mile, and during off-duty time of within 10 miles. • Because ELDs effectively negate the need for supporting documents to verify driving time, the FMCSA has implemented new document retention requirements to verify on-duty, not-driving time. These documents include bills of lading, itineraries, schedules or equivalent documents indicating the origin and destination of a trip; dispatch records, trip records or equivalent documents; expense receipts related
5
to on-duty not driving time; text messages, e-mail messages, instant messages or other electronic mobile communications transmitted through a fleet management system; and payroll records, settlement sheets or other documents reflecting driver payments. All supporting documents must contain driver identification, date, vehicle location and time. Drivers are required to submit such documents within 13 days of receipt and produce those in their possession to law enforcement upon request. Fleets are required to maintain them in a manner that will facilitate being easily matched to the logs. • ELDs must be able to transfer data electronically via either a “telematics” approach capable of wireless Web service or a “local” method capable of bluetooth and USB 2.0 transfer. In all circumstances, drivers must be able to show a roadside inspection officer a graph-grid of their hours of service compliance, either on the ELD’s display or on a hardcopy paper printout. • Manufacturers are required to test and certify to the FMCSA that their devices meet the new standards. • The rule prohibits motor carriers from using information from ELDs to pressure drivers into violating regulations. The final rule also requires ELDs to either automatically mute or allow a driver to turn off or mute the volume on the ELD (or the fleet management system with integrated ELD functionality) when they have logged into the sleeper berth status in the ELD.
In January, the Kansas Agribusiness Retailer Association, in conjunction with the Kansas Grain and Feed Association and the Kansas Cooperative Council held its Legislative Action Day at the Statehouse. The day started out with a lunch for members at Topeka Country Club where Senate Majority Leader Terry Bruce and House Majority Leader Jene Vickrey spoke to the audience regarding challenges facing the legislature this session. They reviewed the hot button issues facing the legislature including the year budget deficit and school finance court challenges. After the presentations, KARA staff Ron Seeber and Randy Stookey and KCC President Leslie Kaufman and KCC member services Director Mandy Roe gave a briefing to members of key points they need to update their legislators on
regarding the industry. Those items include proper funding of the state warehouse program, taxation policy, common sense immigration reform, and water policy. After the briefing, members headed to the statehouse and met with their elected representatives and senators. After meeting, members returned to the Country Club where our members enjoyed dinner with numerous legislators and other elected officials. The association staff is very appreciative of our members who set aside work and traveled to our state capitol. Their actions speak volumes to our legislator and will help the industry promote good policy and avoided proliferation of impractical agendas.
• In the event that an ELD malfunctions, the driver is required to immediately begin completing a paper log and to reconstruct logs for each of the past seven days, unless the driver already possesses the records or the records are retrievable from the ELD. ELDs must be repaired within eight days, subject to an FMCSA-approved extension. • Authorized use of a commercial motor vehicle (CMV) for personal conveyance will not be recorded as on-duty driving, but rather off-duty time. • Drivers will be able to make edits and annotations to their electronic logs; however, the edits will not overwrite or erase the original record, which will be retained. Employers will be able to request edits or annotations, but those must be approved by the driver. • All ELDs must be capable of exporting data in a standard file format to facilitate importing by other systems. However, devices and systems are not required to be capable of importing these records.
SPRING 2016 - THE KANSAS AGRIBUSINESS UPDATE
SPRING 2016 - THE KANSAS AGRIBUSINESS UPDATE
On Dec. 10, 2015, the Federal Motor Carrier Safety Administration (FMCSA) announced its final rule requiring the adoption and use of electronic logging devices (ELDs) by all drivers currently required to complete paper records of duty status (logs). In July 2012, Congress required FMCSA mandate the use of ELDs. The final rule requires fleets and drivers to complete paper logs to adopt and use compliant ELDs by December 2017, unless they are currently using automatic on-board recording devices that are grandfathered (see below).
Legislative Action Day a Great Success
Pictured are KARA members Ted Behring, Farmers Coop Equity, Isabel; Johnny Schaben, Golden Valley, Inc.; Rozel, and Kevin Brady, Lang Diesel Inc., Benton. 6
Agricultural Chemical Remediation Reimbursement Program: Update
The Remediation Reimbursement Program provides financial reimbursement of expenses incurred while performing remediation activities for agricultural chemical and fertilizer contamination, as ordered by the Kansas Department of Health and Environment (KDHE) for properties enrolled in the Voluntary Cleanup and Property Redevelopment Program. Under the Reimbursement Program, commercial grain elevators and participants in the ag-chemical and fertilizer industry pay fees into the Reimbursement Fund. The Board then distributes up to $200,000 from the fund to applicants of eligible remediation sites. The Remediation Fund receives no state general fund money, and is 100% financed by annual assessments on licensed commercial grain warehouses, custom fertilizer blender licensees, commercial fertilizer registrants, agricultural chemical registrants, and pesticide dealers. The Reimbursement Program is administered by a governor-appointed body: the Kansas Agricultural Remediation Board (KARB). The KARB consists of five governor-appointed members and two ex-officio representatives: an agricultural retailer, an agricultural producer, an agricultural (grain) processor, a specialty chemical distributor, and an agricultural and specialty chemical registrant.
Ex-officio members represent the KDHE and the Kansas Department of Agriculture. Since 2009, reimbursement requests have exceeded the amount paid into the Reimbursement Fund. Therefore, pursuant to the requirements of the act, a priority-based ranking system is utilized for all applications received, by which each application is reviewed by the KDHE and given a priority score. Applications involving potential risk to human health and safety are given a higher priority level. Any application which is not reviewed by the Board in a quarter, due to an insufficient fund balance, is carried forward to future Board meetings to be reviewed. During 2015, the KARB met four times to review and consider reimbursement applications. The Board ordered reimbursement of forty-three (43) applications for fertilizer and ag-chemical remediation project expenses, totaling $1,031,013. Since 2001, the Remediation Fund has assisted in paying $16.75 million to grain elevators, ag chemical and fertilizer facilities across Kansas to help offset non-insurable expenses incurred through the remediation of environmental contamination, furthering the goal of ensuring clean soil and water in Kansas. This remarkably beneficial program is currently underfunded, however, by around $4.5 million. Next KARB meetings: June 10th, September 16th, and December 9th. Applications must be submitted four weeks prior to the date of the meeting to be considered.
KARA Facilitates Statewide Grain Tour with the Attorney General In April, Attorney General Derek Schmidt contacted KARA and asked if staff would assist in scheduling visits with our members across the state to discuss issues important to the industry. KARA facilitated and participated in meetings with the General and our members. The meetings took place with Ag Partners in Hiawatha, Frontier Ag in Wakeeney, Alliance Ag and Grain in Wright, Farmway Coop in Lincoln, and Danville Coop at their Newport location. During the meetings, the Attorney General heard from KARA members about the federal regulatory burdens facing
the industry and shared with members what his office has done to slow the proliferation of such mandates. He explained how his office has entered into lawsuits against the federal government with regard to the EPA’s Waters of the United States proposed regulations, the lesser Prairie Chicken proposal and Clean Power Plan mandate. KARA would like to thank the Attorney General for meeting with KARA members and staff and participating in frank discussion on key agribusiness issues.
SPRING 2016 - THE KANSAS AGRIBUSINESS UPDATE
SPRING 2016 - THE KANSAS AGRIBUSINESS UPDATE 7
In 2000, the Kansas Legislature passed the Agricultural and Specialty Chemical Remediation Act which created the Remediation Reimbursement Program and the Kansas Agricultural Chemical Remediation Reimbursement Fund (Remediation Fund).
8
ResponsibleAg Initiative Offers Process Safety Management Compliance Toolkit
To assist with this new requirement, the ResponsibleAg Initiative now offers MyPSM+RMP Compliance Assistance Tool* and PSM Training Modules* available now at www.responsibleag.org. These online materials will assist ag
USDOT Proposes Increased Rules on CDL Training The U.S. Department of Transportation Federal Motor Carrier Safety Administration (FMCSA) recently proposed new requirements that could discourage potential drivers from seeking a commercial driver’s license (CDL) and dissuade employers from providing opportunities for CDL training. The proposed rule, released March 4th, makes modifications to the FMCSA’s Entry Level Driver Training (ELDT) requirements, including the establishment of minimum training requirements that must be met before testing for a CDL. The proposal requires 30 hours of behind-the-wheel (BTW) training for a Class A license and 15 hours for a Class B license. It also includes a registration requirement for the employer to become an “entry-level driver training provider.”
The MyPSM+RMP compliance assistance tool was developed by Asmark Institute, The Fertilizer Institute, and the Occupational Safety and Health Administration. The Compliance Tool and Training Modules are available without cost to all retailers. Facilities enrolled in ResponsibleAg have access to enhanced plan and documentation functionality. ResponsibleAg members also have access to the ResponsibleAg help desk, where they can receive answers to compliance questions on PSM and other federal regulations. “A rule of PSM’s scope and depth creates incredible compliance challenges for small businesses, and we urge retailers to take advantage of this opportunity,”
In comments submitted to FMCSA, the National Grain and Feed Association (NGFA) noted that an onerous process for becoming a training provider will further shorten the supply of CDL drivers. NGFA maintains that BTW training should not be required; but if it is required, the training curriculum should have no time requirement and be outcome-based. Regarding the employer requirement, the gateway to a CDL often begins at grain, feed and processing businesses that are not solely engaged in trucking. To date, these businesses have been able to address a need for multi-disciplinary employees by using in-house expertise to conduct training ahead of CDL tests. FMCSA must craft its requirements for training providers in a manner that maintains flexibility for employer-based training. The U.S. Food and Drug Administration on April 6, officially published its final regulations implementing the sanitary
said ResponsibleAg Executive Director Bill Qualls. “Given the time involved in compliance, and the seasonal nature of the retail business, being ready for PSM compliance in September necessitates becoming involved now.” ResponsibleAg encourages all agricultural retailers to visit www.responsibleag. org and learn more about the benefits of participation. To access the MyPSM+RMP tools, go to www.responsibleag.org and select “participants.” This page provides access to a landing page where visitors have the option of accessing “training modules,” or clicking on the MyPSM+RMP logo for the compliance assistance tool. For more information on these compliance programs, please contact the ResponsibleAg Help Desk at (270) 683-6777 or visit the ResponsibleAg website.
food transportation provisions embodied in the Food Safety Modernization Act (FSMA). The final rule’s requirements generally take effect one year following publication - or on or about April 6, 2017. The NGFA previously submitted extensive comments to FDA urging that it make significant changes to the proposed rule, which the agency issued in January 2014. Importantly, FDA’s final rule largely exempts rail carriers and truckers from the rule’s requirements unless the shipper and the carrier have a written agreement (e.g., contractual agreements) making the carrier or another party responsible, in whole or in part, for sanitary conditions during the transportation operation. This written agreement also covers any obligation by the rail carrier or trucker to inform the shipper or receiver of the immediate previous load hauled in a conveyance, as well as information requested by the shipper regarding the most recent cleaning of bulk vehicles.
OSHA’s Process Safety Management: Update In July of 2015, through a guidance memo, the Occupational Safety and Health Administration (OSHA) arbitrarily changed its interpretation of its Process Safety Management (PSM) regulations to now apply to farm supply retailers. This new guidance is in direct contrast to the agency’s previous interpretation of the rule that had exempted retailers of fertilizer products from the PSM requirements. Since that time, KARA has joined agribusiness organizations across the nation seeking retraction of OSHA’s change to the regulations. Prior to last July, farm supply retailers were exempt from complying with the PSM regulations. If left unchanged, these regulations will place significant time and cost burdens on all farm retailers of anhydrous ammonia. The agency’s policy change is stated to be in response to the ammonium nitrate explosion that occurred in West, Texas in 2013. Following the incident, President Obama issued Executive Order (EO) 13650 “Improving Chemical Facility Safety and Security.” OSHA previously
defined a retail facility as one that derived more than 50 percent of its income from direct sales of highly hazardous chemicals to the end user, otherwise known as “the 50 percent test.” OSHA estimates the cost of complying with PSM regulations at $2,100 per facility. However, the industry cost estimates per facility are $30,000 for initial compliance, $12,000 in recurring annual compliance costs and $18,000 for a three-year audit. Overall, this interpretation change could cost the industry more than $100 million to come into compliance. In fact, there are reports that some farm retailers are seriously considering consolidating facilities or getting out of the anhydrous ammonia business altogether. In December of 2015, in the Federal Omnibus Appropriations bill, Congress prohibited OSHA from enforcing PSM on farm retailers of NH3 until the agency had ran the change through the formal rule making process. Congress sent a message to OSHA directly the agency to withdraw its guidance memo, but the agency has indicated it is unwilling to follow the intent of Congress. In fact, OSHA
AG Schmidt: New York company to pay fine for impersonating local co-op company also banned from telemarketing in Kansas
Coating and Chemicals and Jack Caratozzolo, all of New York state, agreed to a consent judgment ordering them to pay $10,000 in investigative fees and civil penalties. The judgment was approved earlier this month by Judge Franklin Theis in Shawnee County District Court.
TOPEKA – (April 13, 2016) – A New York-based company has agreed to pay $10,000 in penalties and fees to settle allegations that it impersonated a local agricultural co-op and violated the Kansas No Call Act, Attorney General Derek Schmidt said today. Carso, Inc., d/b/a Supply House, d/b/a
In 2014, the attorney general’s office received multiple complaints from Kansans who had received telemarketing calls from the company. The callers identified themselves as representatives of “Farmway,” which is a local Kansas cooperative with no connection to the defendants or the alleged telephone calls. The callers were trying to sell agri-
has stated that it intends to enforce PSM on farm retailers of NH3 beginning October 1, 2016, without going through the formal rule making process. This March, KARA joined other state and national groups in requesting that House and Senate Appropriators include specific language in the FY 2017 federal appropriations bill requiring OSHA to withdraw the memo that ended this decades-long exemption for ag retailers, and prohibiting OSHA from enforcing PSM on ag retailers of NH3 in FY 2017, or any year thereafter, without going through the formal federal rule making process. In addition, KARA contacted each member of the Kansas Congressional delegation and received confirmation that they would support a Congressional Ag coalition letter to the House and Senate Appropriations Committee members seeking inclusion of that specific language. This Congressional Ag coalition letter was sent to Appropriations Committee members on March 23rd. KARA will continue to work with our state and national partners to push for inclusion of this language in the 2017 federal appropriations bill.
cultural chemicals.
SPRING 2016 - THE KANSAS AGRIBUSINESS UPDATE
SPRING 2016 - THE KANSAS AGRIBUSINESS UPDATE 9
Last summer, the federal Occupational Safety and Health Administration (OSHA) stated its intention to require ag retailers of anhydrous ammonia to comply with Process Safety Management (PSM) regulations. While state and federal ag industry associations continue to push back on this new requirement, OSHA will begin enforcing PSM as soon as October 1, 2016 if Congress does not act to prevent the new regulation.
retailers in complying with the complex PSM rule and the associated Risk Management Plan (RMP) Program Level 3 obligations.
Under terms of the settlement, the defendants are prohibited from misidentifying themselves to Kansas consumers and are banned from future telemarketing in Kansas. A copy of the consent judgment is available at http://1.usa.gov/1SZEoP9 . Kansans who wish to register for the Do-Not-Call list or file a complaint should visit the attorney general’s consumer protection website at www.InYourCornerKansas.org.
10
KARA
On Tuesday, April 19, 2016, the Governor’s Blue Ribbon Funding Task Force on Water Resource Management met to receive public comment and testimony on funding proposals for the State Water Plan and the Governor’s Long-Term Vision for the Future of Water Supply in Kansas. Members of the Task Force, to include Association President Tom Tunnell, were appointed by the Governor. The Task Force includes directors of ten state organizations, six Kansas Legislators, and four state agency heads. KARA General Counsel Randy Stookey, in testifying before the Task Force, stated that KARA members are experts in the handling, storage, and application of agricultural chemical and fertilizer products. Stookey expressed that KARA members work with state agricultural producers, and state and federal regulators, to ensure the safe and efficient storage and use of fertilizers and ag chemicals in optimizing crop production in Kansas. Current funding mechanisms for the Kansas State Water Plan Fund (SWPF) include various user fees on the agribusiness indus-
11
try and municipal water users. The original intent of the legislature, under the State Water Plan, was for all users of water in the state to contribute to the SWPF. As residents of the state, KARA members contribute to the SWPF through the Water Protection fee and the Clean Drinking Water fee. Additionally, the agribusiness industry contributes the following ag industry-specific funds: $100 for each agricultural chemical product registered annually in the state, and $1.40 per ton on each fertilizer product that is sold in Kansas. In state fiscal year 2015, the fertilizer tonnage fee generated $3.39 million for the SWPF, and agricultural chemical product registration fees accounted for $1.28 million into the SWPF. By statute, $6.0 million is required to be transferred annually from the State General Fund (SGF) into the SWPF. An additional $2.0 million is required to be transferred into the SWPF annually from the Economic Development Initiatives Fund (EDIF). This total annual required transfer ($8.0 million) from the SGF and the EDIF reflects the legislative intent of a collective contribution for the common water resource management needs of our state. The funding needs for water resource management in our state continue to grow, however, the legislature has failed to fully fund the SWPF in recent years. In fact, since state fiscal year 2009, the legislature has failed to transfer a total of $50.6
million from the state general fund. Additionally, since state fiscal year 2014, the legislature has failed to transfer a total of $7.2 million from EDIF into the SWPF. Had recent Kansas legislatures fully funded the SWPF from the SGF and the EDIF, as required by law, an additional $57.9 million would have been available for funding many of our water resource management needs. KARA Proposal The Governor’s Long-Term Water Vision and the Blue Ribbon Task Force mission seeks to address issues of both water quantity and water quality. Similarly, state water plan programs target both water conservation and water quality, including, streambank stabilization and a new Water Quality Conservation Reserve Enhancement Program (CREP). The KARA Board recently discussed the goal of identifying meaningful and attainable water quality projects. The Board approved a proposal which would address the issue of water quality in our state, and ensure the future health of the Kansas Agricultural Remediation Reimbursement program which assists ag chemical and fertilizer facilities with the expense of removing pesticides and fertilizers in Kansas ground water and soil. The Ag Chemical Remediation Reimbursement Fund (Remediation Fund) is 100% financed by annual assessments on commer-
cial grain warehouses, custom fertilizer blender licensees, commercial fertilizer registrants, agricultural chemical registrants, and pesticide dealer fees. The Remediation Fund and program are essentially a form of self-insurance that provides a tremendous service to the Kansas agribusiness industry. Since 2001, the Remediation Fund has assisted in paying nearly $17 million in non-insurable remediation costs to ag chemical and fertilizer facilities across the state. However, this Remediation Fund is currently underfunded by around $4.5 million. The KARA proposal would increase the fertilizer tonnage tax collected by our industry (currently $1.67/ton) by an additional 50 cents per ton. The additional fee would generate approximately $1.1 million annually. The additional funds would be used to enhance the Remediation Fund in order to meet the growing demand on the fund by our industry. KARA feels this new fee on the fertilizer tonnage tax is appropriate, and necessary, as 90-95% of all new applications to the Remediation Fund are for remediation of nitrates in ground water and soil. Currently, fees on pesticide product registration and grain warehouse licenses account for close to 90% of the funds entering the program annually. In addition, a small percentage (15%) of the new funds may be utilized through the state water plan to assist with the newly passed water quality Conservation Reserve Enhancement Program
(CREP). The goal of this program is to reduce nutrient load and sedimentation run-off in limited watershed areas directly above reservoirs in the state that are experiencing recurrent algae blooms. On Tuesday, Stookey submitted the KARA proposal to members of the Blue Ribbon Task Force. As stated in the testimony, KARA’s proposal would further the goals of the Governor’s water vision for water quality; enhance the ability of the ag chemical and fertilizer industry to perform remediation of ground water contamination from nitrates and other fertilizers; and, reduce nutrient and sedimentation run-off in targeted watershed areas. The KARA proposal addresses water quality concerns in our state, and demonstrates to state and federal regulators that the Kansas ag industry is ensuring best management and control of Kansas waters.
SPRING 2016 - THE KANSAS AGRIBUSINESS UPDATE
SPRING 2016 - THE KANSAS AGRIBUSINESS UPDATE
Testifies Before Governor’s Blue Ribbon Funding Task Force on Water Resource Management
KARA testimony before a state water resources task force yesterday advocated for full funding of the state water plan, and offered a proposal to clean up nitrates in ground and surface water by increasing the size of the Kansas Agricultural Chemical Remediation program and other programs.
12
Nemaha County Coop: Pictured are Doug Biswell, Bobby Martin and Ron Seeber.
Association staff took advantage of the break between the regular legislative session and the veto session to visit members during one of our no ties tours. Thank you to our members who took time from their busy schedules to discuss industry issues, politics and everything else!
Morrill Elevator. Pictured are Ron Seeber and J.R. Isch
Kansas Agribusiness Retailers Association 816 SW Tyler, Suite 100 Topeka, Kansas 66612
Underwriter $15,000+ KFSA Founder $7,500 BASF Koch Ag & Energy Solutions Benefactor $5,000 Dow AgroSciences Syngenta Patron $3,500 ADM Wholesale Fertilizer Bayer CropScience CHS Inc. CoBank ACB Coffeyville Resources Crop Production Services Heartland Ag, Inc. Helena Chemical Co. John Deere CAD Dealers Lang Diesel Inc.
Patron $3,500 (cont’d) Monsanto Rosen’s Inc. Simplot Growers Solutions United Suppliers Verdesian Life Sciences Wilbur-Ellis Co. Builder $2,000 Allied Environmental Consultants Beachner Grain CGB Fertilizer DuPont Crop Protection EGE Products FMC Frontier Ag Inc. J.B. Pearl Sales & Service Kiser Ag Service LLC MKC Morrill Elevator Inc. WinField
Donor $750 AGChoice American Implement, Inc. Brothers Equipment Central Valley Ag Fairbank Equipment, Inc. Farmway Coop Inc. Garden City Coop Gavilon Fertilizer LLC Harveyville Seed Co. Inc. Heartland Tank Services Inc. Kansas Cooperative Council Midwest Laboratories Nemaha County Cooperative Offerle Coop Grain & Supply Co. Performance Ag Pride Ag Resources Purple Wave Auction Riggins Ag The Ottawa Cooperative Assn.
The Kansas Agribusiness Update is published quarterly for the members, friends and affiliates of the Kansas Agribusiness Retailers Association. Mail contributions to KARA, Attention: Devon Stewart, 816 SW Tyler, Topeka, KS 66612 The KARA team welcomes your comments, contributions and suggestions. Annual subscriptions for members can be purchased for $25. © 2016 KARA