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PA Bulletin, Doc. No. 03-138




[7 PA. CODE CH. 106]

Aquaculture Development Plan

[33 Pa.B. 541]

   The Department of Agriculture (Department), under the authority of 3 Pa.C.S. §§ 4201--4223 (relating to the Aquaculture Development Law) (act), adopts Chapter 106 (relating to aquaculture development plan).


   The Department has the power and authority to adopt this final-form rulemaking under the following:

   (1)  The specific authority conferred by section 4215 of the act (relating to aquacultural plan), which confers upon the Department the power to promulgate regulations regarding aquaculture development. It states, ''The department shall develop a plan to promote and develop aquacultural industry in this Commonwealth. Economic development and exportation of products from this Commonwealth shall be components of this plan. . . .The department shall, in the manner provided by law, promulgate the plan as regulations of the department.''

   (2)  The general duty to implement the policy of the act set forth at section 4218 of the act (relating to Aquaculture Development Account), which establishes an Aquaculture Development Account and states, ''Money in this account shall be used to stimulate the growth of the aquacultural industry. . .the account may be used to provide low-interest loans to aquacultural producers for development, expansion and modernization of facilities.'' The Department has the duty to establish an aquaculture loan program.

Need for the Chapter

   The law was enacted to ''create an atmosphere conducive to the further development and expansion of our aquacultural industry.'' The regulations implement a Departmental policy to encourage aquaculture production and marketing. The regulations are consistent with the Department's obligations under the act.

   The Department is satisfied there is a need for the regulations, and that they are consistent with Executive Order 1996-1, ''Regulatory Review and Promulgation.''


   Notice of proposed rulemaking was published at 32 Pa.B. 2468 (May 18, 2002), and provided for a 30-day public comment period. Comments were received from the Independent Regulatory Review Commission (IRRC) and the Pennsylvania Farm Bureau (Bureau). The Department has considered the comments and believes the final-form rulemaking addresses the commentators' concerns.


1.  Program Costs.--Economic Impact.

Comment: IRRC

   The preamble to the proposed rulemaking stated that there is a separate account in the State Treasury called the Aquaculture Development Account. The preamble further stated that this account is funded by fees and charges generated under the act. However, the Department also acknowledged that ''moneys for use in the development and administration of the grant and loan programs established by this proposed rulemaking will need to be provided through future appropriations to the Aquaculture Development Account.''

   *  When will these programs be funded?

   *  How is the program ''revenue neutral'' as stated in the regulatory analysis form?

   *  Will registration fees for aquaculture producers increase as a result of implementation of the Aquaculture Development Plan?

Comment: Bureau

   The aquaculture industry in this Commonwealth is a very important one, with over 165 registered production facilities and over 100 suppliers. Many of these individual operations are members of the Bureau, and several of the aquaculture farmers actively participate in the Bureau's State Commodity Programs. Aquaculture is a key piece in the agricultural success of this Commonwealth and the Bureau.

   Overall, the Bureau found the proposed regulations regarding the Aquaculture Development Plan to be an excellent basket of tools for promoting and preserving the aquaculture industry within this Commonwealth. The Bureau is especially enthused with Subchapters E and G (relating to aquaculture product identification program; and aquaculture export promotion program). The Bureau feels these two components of the overall aquaculture development plan will provide many benefits and incentives to Pennsylvania fish farmers.


   The act establishes the Aquaculture Development Account and states the fund's usage: ''After administrative costs are covered, the remainder of the account may be used to provide low-interest loans to aquacultural producers for development, expansion and modernization of facilities.'' The account may only be used to fund administrative costs and the loan program being established under Subchapter A. In reality, the small number of propagator and live aquatic animal dealer registrations does not generate enough funds to cover current costs for aquaculture program administration. Current aquaculture programming is being funded by the Department's general fund. The additional programming described in this regulation would require new appropriations to the Department's general fund. The Bureau anticipates the programs being considered for funding beginning with the 2003-2004 State fiscal year.

   ''Revenue neutral'' was defined to us as ''not placing additional mandated costs on the regulated community.'' Since all programming within the regulation is voluntary, it would meet this definition. It was never intended to suggest the current account revenues could support these programs.

   Registration fees are set within the act itself and no fee increase is anticipated. We appreciate the support and validation the Bureau's comments provide as to the benefits being sought through these regulations.

2.  Issues Common to the Application and Review Processes for these Programs--Need; Reasonableness; Clarity.

Comment: IRRC

Payment of participation fees

   The programs this final-form rulemaking will establish require applicants to pay participation fees. However, it is unclear when these fees must be paid. Subchapters C--G appear to contain contradictory language. They require the participation fee to be submitted with the application in one subsection, and then, in a later subsection, require the fee to be paid after receiving notice of acceptance into a program (such as, §§ 106.104(b)(5) and 106.107(a)). The final-form rulemaking should clarify when the participation fees for each program are due.

Return of Participation fees

   When a program requires a participation fee and the applicant is rejected, will the participation fee be refunded? If so, the final-form rulemaking should include provisions that prescribe how and when participation fees will be returned to the applicant.

Structure of Regulations

   The final-form rulemaking is structured so the review of applications sections comes before the processing of applications sections. Since the processing of applications sections of the regulation address items such as completeness of the application and requests for additional data, clarity may be improved by reversing the order of the review of applications and processing of applications sections.

Review of Applications

   The Aquaculture Education Enhancement Program (AEEP), the Aquaculture Product Information Program (APIP), the Aquaculture Product Promotion Program (APPP) and the Aquaculture Export Promotion Program (AEPP) each have sections relating to review of applications (such as §§ 106.53 and 106.105). Subsection (a), relating to evaluation, and subsection (b), relating to applicant eligibility, are not needed and should be deleted from the final-form regulation. Subsection (c), relating to application completeness, duplicates provisions found in the sections relating to processing of applications. Therefore, it should also be deleted.

   The final-form rulemaking contains a list of factors that the Department will consider in selecting participants for the Aquaculture Education Enhancement Activity Program, the AEPP and the APIP. Included in the list of factors is the applicant's ''ability to pay, or cost share, the. . .activity costs.'' (§§ 106.53(d)(5), 106.135(d)(6) and 106.165(d)(6)). Sections 106.52, 106.134 and 106.104 require payment of the participation fee with the application. It is unclear if the ability to pay/cost share provision has any relationship to the participation fee for the program. If the ability to pay/cost share is the same as the participation fee, then the ability to pay/cost share provision is duplicative and should be deleted.

Approval of Applications

   In Subchapters A, C and E--G, in the processing of applications sections, the Department states that it may ''approve, approve with special conditions or reject applications and issue participation approval. . . .'' IRRC requested the Department explain how ''participation approval'' is different from approval.

Release and hold harmless provisions

   For each program authorized by this regulation, there is a requirement that eligible participants release and hold harmless the Department and Commonwealth from liabilities and losses (such as § 106.53(c)). The regulation should specify if there are any forms or agreements that must be signed to comply with this requirement.

Aquaculture Advisory Committee (Committee) member participation in programs

   The final-form rulemaking authorizes a Committee member to participate in the aquaculture development programs if ''all decisions regarding the application are subject to 65 Pa.C.S. § 1103(j) (relating to restricted activities) and the action does not violate the State Adverse Interest Act (71 P. S. §§ 776.1--776.9) or Chapter 7, Subchapter K (relating to code of conduct for appointed officials and State employees).'' (§§ 106.3(e)(3), 106.44, 106.109, 106.140 and 160.170). IRRC requested the Department explain how the determination will be made that a Committee member's participation meets these requirements.


   The final-form rulemaking resolves the ambiguity in regard to payment of participation fees and return of participation fees by requiring all fees to be submitted at the time of application and providing a timeline and structure for return of participation fees from unsuccessful applicants.

   The review of applications section sets forth the general evaluation criteria, applicant eligibility standards, application completeness standards and factors the Department will consider in reviewing the application. In other words it sets forth the base line criteria that must be met in any application. The processing of applications section sets forth details concerning the approval process including how an application will be reviewed, time period for review and how the Department will handle incomplete applications. The final-form rulemaking gains a logical flow by notifying the applicant of what must be contained in an application and the factors the Department will consider, notifying the applicant how that application will be processed, and delineating how and when the applicant will be notified of the disposition of the application. Therefore, the Department believes the regulation does have a logical flow and does not believe changing the order of these sections will add clarity to the regulation.

   The final-form rulemaking removes the noted sections relating to review of applications (e.g. §§ 106.53 and 106.105, subsections (a)--(c)), and §§ 106.53(d)(5), 106.135(d)(6) and 106.165(d)(6).

   The final form rulemaking clarifies the approval of applications by removing the term ''participation approval'' and replacing it with ''approval'' wherever it occurs.

   The final-form rulemaking specifies that the applications shall contain release and hold harmless provisions which the applicants agree to when they sign the applications. Unsigned applications will be considered incomplete.

   The final-form rulemaking resolves the issue of Committee member participation in programs by stating that members must sign a statement certifying that they have complied with the referenced codes and copies of the codes will be provided to members upon request.

Subchapter A. Aquaculture Production Development Program

3.  Section 106.1. Program objectives.--Clarity.

Comment: IRRC

   This section states that low-interest financing will be available to businesses ''unable to fully finance these projects with equity, bank financing, or other private and public sources.'' The final-form rulemaking should specify the documentation that the applicant must provide to demonstrate that this criteria has been met.

Comment: Bureau

   Subchapter A sets forth the Aquaculture Production Development Program and provides for low-interest loan financing for a portion of the costs of land, building, machinery, equipment, working capital, and training to businesses unable to fully finance these projects with equity, bank financing or other private and public sources.

   In regard to the low interest loans, the Bureau questioned whether the requirement that to qualify for a low-interest loan, the fish farmer must be turned down by a lending institution or other public/private source. IRRC feels this requirement would exclude most fish farmers in this Commonwealth and would contradict the purpose of the Aquaculture Production Development Program. The Bureau questioned whether this requirement was an act restriction.


   The language of the final-form rulemaking does not commit the Commonwealth to being the ''lender of last resort'' as this phrase implies. The act does not require this. Therefore, a fish farmer would not have to be turned down by another lender before he could apply. However, the final-form rulemaking includes a provision that applicants must provide verification of all financing sources, total project costs, and documentation of all financing requested and the results of the requests.

4.  Section 106.3. Eligibility.--Clarity.

Comment: IRRC

Subsection (b) Eligible activities

   Subsection (b)(2) states that, ''the project adopts generally acceptable pollution prevention and environmental stewardship practices.'' What are ''generally acceptable pollution prevention and environmental stewardship practices?'' These practices should be defined in the final-form rulemaking. Alternately, if these practices are defined elsewhere in existing regulations or guidance documents, these documents or regulations should be cross-referenced in the final-form rulemaking. Subsection (b)(3)(ii) states that the required certification can be obtained by an ''environmental professional approved by the Department.'' IRRC had three concerns.

   First, the term ''environmental professional'' is vague. Adding a definition of this term or a citation to a definition would improve clarity.

   Second, the regulation requires the ''environmental professional'' to be approved by the Department. IRRC requested the Department explain the approval process. Finally, how will the list of environmental professionals approved by the Department be provided to the public? The final-form rulemaking should identify where and how this information will be made available.

Comment: Bureau

   Several fish farmers who are members of the Bureau questioned whether machinery, such as live-haul trucks, and land, such as ponds, are included in the list of acceptable projects for low-interest loan financing. Live-haul trucks and ponds are important pieces of many aquaculture operations and should be included as acceptable items for this program.


   The final-form regulation defines ''generally acceptable pollution prevention and environmental stewardship practices'' as ''Those best management practices (BMPs) for aquaculture categorized and explained in the Pennsylvania Aquaculture BMP Guide as approved by the Committee.'' The Committee's NPDES Subcommittee is currently working on development of a general aquaculture NPDES permit. One of the components of this task is to publish a Pennsylvania Aquaculture BMP Guide. IRRC expected this work to be completed by spring 2003.

   The Department has removed the criteria regarding and all references to ''environmental professional'' in the final-form regulation. In considering a response to IRRC's comment the Department became aware that the Department of Environmental Protection does not ''certify'' that a project will comply with environmental laws and regulations. In addition, the act provides no authority to the Department to ''approve'' or ''certify'' an environmental professional. Therefore, in the final-form rulemaking the Department amended the language in § 106.3(b)(2) to delete the reference to ''certification'' of the proposed project and deleted all of § 106.3(b)(3) which contained the reference to an ''environmental professional

   Eligible costs under this subchapter include land cost whether that land is being used for a hatchery building, production ponds, or other farm uses directly related to the project proposed for funding.

   Machinery costs include all types of machinery except vehicles titled or registered for highway use. This would exclude live-haul trucks to be used offsite for deliveries. However, since the APDP may only finance up to 50% of a project's total costs, this provision does not keep the commercial lender from financing such a purchase.

5.  Section 106.4. Ineligible activities.--Clarity.

Comment: IRRC

   Paragraph (2) addresses nonprejudicial approvals. However, the title of this section is ''Ineligible activities.'' Paragraph (2) should be removed from § 106.4 and either placed in a new section or moved to § 106.3, relating to eligibility.


   The final-form rulemaking moves the referenced paragraph from § 106.4 to become § 106.3(g).

6.  Section 106.5. Program requirements.--Fiscal Impact; Reasonableness; Clarity.

Comment: IRRC

Subsection (c) Jobs

   This subsection requires that one full-time job be created or preserved when the project is funded under the APDP. What is the basis for this requirement? Given that loan amounts could be as small as $10,000, is it reasonable to require the creation or preservation of one full-time equivalent job for each project funded under the APDP? If this requirement is not met within 3 years from completion of the project, is the loan recipient required to immediately repay the entire loan amount?

Subsection (d) Terms

   This subsection sets forth the terms for the loan agreements. Please explain the basis for the payment periods in subsection (d).

Subsection (f) Fees

   Paragraph (2) states ''reasonable loan processing fees may be charged.'' On what basis will the ''reasonable'' fees be determined?

   Additionally, paragraph (2) states that the applicant ''should'' check with the local provider regarding fees. ''Should'' is nonregulatory language which is inappropriate in regulations. It would be clearer to simply state that the local service provider or area loan organization will set the fees.

Subsection (i) Priority

   Subsection (h)(1) refers to ''good credit rating containing no late payments or write-offs.'' It appears that the standard which must be met under this paragraph is ''no late payments or write-offs.'' The use of the word ''good'' is superfluous and creates an undefined standard. The Department should either delete ''good'' or include criteria for determining what credit rating constitutes a ''good'' credit rating. Subsection (i)(4) refers to a ''proven profit-making venture.'' What criteria will be used to determine if a venture meets the ''proven profit-making'' requirement?

Comment: Bureau

   Under § 106.5(e), the Bureau recommended that, under terms of agreement for low-interest loans, loans used for real estate have a repayment period of up to 15 years. A repayment period of only 10 years would have negative effects on the early cash flow needed for most fish farms in this Commonwealth. The Bureau would also recommend that loans for working capital have a repayment period of up to 5 years. Also under § 106.5(h)(1), we believe the requirement that a borrower of the low-interest loans not be allowed to relocate from one area of the Commonwealth to another without at least a 25% increase in net employment to be excessively burdensome on the farmer. The Bureau feels that if a fish farmer were to receive a low-interest loan, and then move his operation outside of this Commonwealth, he should be required to repay the loan in full to the Commonwealth. However, if a fish farmer finds that he must move to another part of this Commonwealth to keep his operation economically healthy, the farmer should have the right to do so without the requirement of a 25% increase in net employment.


   The final-form rulemaking does not have a jobs requirement.

   The Small Business First Program (SBFP) was used as the model from which the APDP was crafted. The loan terms in this chapter were set to be the same as that program. However, the final-form rulemaking sets the real estate repayment period at 15 years and the working capital repayment period at 5 years. The other provisions remain the same.

   Likewise, the fees for processing are to mirror similar fees charged for the SBFP. The final-form rulemaking states, ''The local service provider or area loan organization will set the fees.''

   The final-form rulemaking's subsection (i)(1) reads ''Applicants with credit ratings containing no late payment or write-offs.''

   The final-form rulemaking's subsection (i)(4) adds the following phrase to the requirement, ''as documented by state and Federal tax returns showing taxes paid on business profits.''

   The final-form rulemaking keeps the relocation provisions as originally written. These provisions are valid in order to discourage local communities within the State from competing to encourage employers to move to other localities. Since aquaculture facilities are generally located because of specific site water availability it is highly unlikely that this provision will cause harm to any current or future fish farmer.

7.  Section 106.6. Application submission and approval procedure.--Clarity.

Comment: IRRC

   Subsection (d)(14) states, ''The collateral position of the Department will not be less than a second lien on the assets being funded unless specifically approved in writing by the Department.'' Under what circumstances would the Department accept a collateral position less than a second lien on the assets?


   The Department would consider accepting less than a second lien position on assets when the appraisal of assets shows sufficient value to cover all liens if the assets where to be sold at bankruptcy sale (75-80% of appraised market value).

8.  Section 106.12. Contact information.--Clarity.

Comment: IRRC

   Subsection (a) lists methods to contact the Department, but does not include an e-mail address. If the Department is available by e-mail, that information should be included in the final form rulemaking.


   The final-form rulemaking provides a generic e-mail address for the Bureau. The Department believes the generic e-mail address will better serve the regulated community since specific e-mail addresses are individual specific and do not take changes in employee responsibility or employment status into consideration.

Subchapter B. Aquaculture Producer Resource Program

9.  Section 106.22. Limitations.--Clarity.

Comment: IRRC

   Subsection (a) references the Department's Internet site but does not list the address. Has the Department considered including the Internet site in the final-form rulemaking?


   The final-form rulemaking provides the Department's website address.

Subchapter C. Aquaculture Education Enhancement Program

10.  Section 106.43. Notice of activities.--Implementation procedures.

Comment: IRRC

   Subsection (a) states that the Department will use one of the three methods to notify eligible applicants of AEEP activities. The three methods include publication in the Pennsylvania Bulletin, direct mailing and advertisements. If the Department uses only one method of notification, such as the Pennsylvania Bulletin, many eligible applicants may not be aware of upcoming activities. Is it the Department's intent to use only one method of notification, or will the Department use a combination of the methods in subsection (a)(1)--(3)? If the Department intends to use a combination of methods, subsection (a) should be modified to clearly reflect this intent.

   Additionally, has the Department considered posting AEEP activities on its website?


   The final-form rulemaking states that the Department may use one or more of the listed methods in any combination and adds the Department's website as a potential method.

11.  Section 106.54. Processing of application.--Reasonableness.

Comment: IRRC

   Subsection (b) addresses how the Department will process applications. IRRC has two concerns.

   First, under subsection (b)(5), relating to incomplete and inaccurate applications from eligible applicants, will 5 days be sufficient for the applicant to obtain the additional information? IRRC noted that the comparable provision in § 106.65(b)(5) gives applicants 10 days to respond.

   Second, under subsection (b)(6)(iv), relating to order of participation availability, will 7 days be sufficient time for the applicant to respond? Is the notification date the same as the date of mailing?


   The Department feels these time periods are appropriate since the projects expected to be undertaken through this program are short-range, simple activities with quick turnaround periods. Section 106.65 pertains to the grant program which is structured to facilitate larger, more complex projects--therefore it has a longer response period. The notification date will be the date of mailing.

12.  Section 106.55. Notice of disposition of application. -- Reasonableness; Clarity.

Comment: IRRC

   Subsection (a), relating to applications deemed complete, states the Department will notify applicants within 15 days of its decision to approve, approve with special conditions or reject the application. Subsection (b), relating to applications deemed incomplete or ineligible, states the Department will notify the applicants of its decision to reject the application or request additional information within 10 days. IRRC has three concerns.

   First, what is the reason for the different time frame in subsection (a) and (b)?

   Second, if the Department does not render a decision within the allotted time for complete applications, is the applicant deemed approved?

   Third, subsection (a) requires an approved applicant to submit the application fee within 5 days of receipt of the approval letter. The APPP and the AEPP allow 10 days for the applicant to submit the fee. Why is the Department allowing only 5 days for the submittal of the fee for the AEEP?


   The final-form rulemaking sets the time frame within each paragraph to 15 days and notes that applications upon which the Department does not render a decision within the allotted period are deemed approved as long as participation space is available within a given activity.

   The final-form rulemaking deletes the reference to participation fee receipt within the AEEP, the APPP and the AEPP since each program requires that the participation fee be submitted as part of the application. In place of this reference, the final-form rulemaking delineates how reimbursement of fees submitted by unaccepted applicants are to be processed and returned.

13.  General.--Sections 106.61--106.66--Clarity.

Comment: IRRC

   Must an applicant return the unused portion of a grant? If so, when?


   The final-form rulemaking delineates that unused funds are to be returned to the Department within 90 days after the project's completion date as stated in the grant contract or the date upon which a grant is terminated by either the Department or the recipient.

14.  Section 106.65. Processing of application.--Reasonableness.

Comment: IRRC

   Under subsection (b)(5), relating to incomplete and inaccurate applications from eligible applicants, is 10 days sufficient to obtain the additional information?


   The Department deems this to be a reasonable and sufficient time frame. However, to increase consistency between programs, the final-form rulemaking states this period to be 15 days for each.

Subchapter D. Aquaculture Market Information Program

15.  General.--Feasibility.

Comment: Bureau:

   Several Bureau members have also voiced concerns about the feasibility of Subchapter D (relating to Aquaculture Market Information Program). Their argument is that this aspect of the program does not seem feasible because fish farmers already know the pricing of their product in the different markets that exist. They state that the pricing system in the aquaculture industry is totally distinct from other ag-related pricing systems such as those for hogs and soybeans and that this program may not work for the aquaculture industry.


   The Department respectfully disagrees with the noted sentiments for several reasons.

   First, the Committee's industry representatives voiced strong support for this program at their October 9, 2001, meeting.

   Second, an aquaculture price reporting system was developed by Maryland's Department of Agriculture several years ago and was very successful.

   Third, the main reason for any price reporting system is to keep the market pricing fair and open by letting all sellers and buyers know the prices being paid for particular types of products.

   Fourth, one of the main reasons behind the act is to encourage new farmers to enter aquaculture production. A price reporting system allows them to make their startup decisions based on fair and accurate price information.

Subchapter E. Aquaculture Product Identification Program

16.  Section 106.102. Limitations.--Clarity.

Comment: IRRC

   Subsection (a) addresses applicant eligibility. The final-form rulemaking requires the aquaculture propagator or aquaculture-related company to be ''in good standing.'' The final-form regulation should specify under what standards ''in good standing'' will be judged.


   The final-form rulemaking defines ''in good standing'' to be propagators or companies which ''are registered or licensed in accordance with all applicable State and Federal laws and current with all debts owed to the Commonwealth and other government entities.''

17.  Section 106.103. General conditions.--Clarity.

Comment: IRRC

   Subsection (b) addresses renewal of APIP participation. Will renewal applications require a participation fee? If so, this subsection should be revised to state that renewal applications require payment of a participation fee.


   The final-form rulemaking clarifies that renewal applications do require a participation fee at the time of renewal.

18.  Section 106.104. Application.--Clarity.

Comment: IRRC

   The phrase ''non-profit entity'' is vague. The Internal Revenue Code and the Pennsylvania Tax Reform Code commonly use the phrase ''not-for-profit.'' A specific citation to the Internal Revenue Code of 1986 (26 U.S.C.A.) describing the types of businesses at issue would add clarity to the regulation.


   The final-form rulemaking subsection (b)(6) clarifies this phrase with the following language, ''Verification that the applicant is subject to the tax laws of the Commonwealth and is not a ''not-for-profit'' as defined by the Internal Revenue Code of 1986 (26 U.S.C.A.).

19.  Section 106. 105. Review of application.--Clarity.

Comment: IRRC

   Subsection (d) addresses factors to be considered by the Department in selecting APIP participants. Under subsection (d)(2), what documentation must an applicant provide to verify that all products are produced in this Commonwealth?


   All applicants must sign a certification statement as part of the application verifying that all products to be covered by the APIP logos and promotional effects are produced in this Commonwealth and that their participation will terminate if this provision is violated.

20.  Section 106.106. Processing of applications.--Reasonableness.

Comment: IRRC

   Subsection (b)(5) gives an applicant 10 business days to submit additional information at the Department's request. Is this enough time to provide the additional information?


   The Department deems this to be a reasonable and sufficient time frame. However, to increase consistency between programs, the final-form regulation states this period to be 15 days for each.

Subchapter G. Aquaculture Export Promotion Program

21.  Section 106.162. Limitations.--Clarity.

Comment: IRRC

   Subsection (b) requires a ''majority'' of the displayed products at an AEPP to be grown or manufactured in this Commonwealth. The term ''majority'' is vague and open to interpretation. We note that the corresponding provision in Subchapter F (relating to the APPP) (§ 106.132(b)) establishes a threshold of 60%. The final-form rulemaking should include a specific threshold as a percentage of production.


   The final-form rulemaking clarifies this by changing the sentence in which ''majority'' appears to be the same as the noted sentence in § 106.132 (b), ''At least 60% of the displayed products in an AEPP activity shall be grown or manufactured in this Commonwealth.''

22.  Miscellaneous Clarity Issues.

Comment: IRRC

Section 106.2.

   *  There are two typographical errors in this section. In the Pennsylvania Bulletin version of this regulation the word ''aquaculture'' is misspelled in the definitions of ''AEEP'' and ''AEPP.''

Section 106.3.

   *  There is a grammatical error in the first sentence of subsection (d)(1). The word ''is'' should be changed to ''are.''

Section 106.10.

   *  The last sentence in this section includes the word, ''thereon.'' This word is unnecessary and should be deleted.

Section 106.163.

   *  In subsection (e)(1), it appears that the words ''more than'' before ''80%'' are extraneous and should be deleted.

Section 106.165.

   *  There is a typographical error in subsection (a). The word ''the'' before ''applicant'' should be deleted.


   These corrections have been noted and rectified in the final-form rulemaking.

Comment: IRRC

Section 106.166.

   *  Subsection (b)(1) is unclear. Clarity would be improved if this subsection was rewritten.


   The noted subsection now appears as follows, ''The application will have the initial date of the postmark or the initial date of receipt, whichever is earlier, noted on the application by Department staff. If the application is determined to be incomplete, the effective date of the application is the date on which all additional information is received and the application is determined by the Department to be complete. The date will be noted on the application.''

Fiscal Impact


   The final-form rulemaking will impose moderate costs and have minimal fiscal impact upon the Commonwealth over time. The final-form rulemaking will require additional paperwork and impose an additional workload on the Department. A full-time clerical position will be needed to support the new programs.

Political Subdivisions

   The final-form regulations will impose no costs and have no fiscal impact upon political subdivisions.

Private Sector

   The final-form rulemaking will impose no additional costs on the regulated community since all programs are voluntary. The private sector participants who participate will benefit through lower cost marketing and loan options. It should be noted that the regulated community participated in the development of the final-form rulemaking and that the Committee voted to approve each section as it was written.

General Public

   The final-form rulemaking will impose no costs and have no fiscal impact on the general public.

Paperwork Requirements

   The final-form rulemaking will result in a moderate increase of paperwork. The Department will need to develop the appropriate forms and procedures to administer the final-form rulemaking.

Contact Person

   Further information is available by contacting the Department of Agriculture, Bureau of Market Development, 2301 North Cameron Street, Harrisburg, PA 17110-9408; Attn.: Leo Dunn, (717) 783-8462.

Regulatory Review

   Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on May 3, 2002, the Department submitted a copy of the notice of proposed rulemaking, published at 32 Pa.B. 2468 (May 18, 2002), to IRRC and to the Chairpersons of the House Agriculture and Rural Affairs Committee and the Senate Agriculture and Rural Affairs Committee for review and comment

   Under section 5(c) of the Regulatory Review Act, IRRC and the Committees were provided with copies of the comments received during the public comment period, as well as other documents when requested. In preparing the final-form rulemaking, the Department has considered all comments from IRRC, the Committees and the public.

   Under section 5.1(d) of the Regulatory Review Act (71 P. S. § 745.5a(d)), on November 25, 2002, the final-form rulemaking was deemed approved by the House Agriculture and Rural Affairs Committee and the Senate Agriculture and Rural Affairs Committee. Under section 5.1(e) of the Regulatory Review Act, IRRC met on December 12, 2002, and approved the final-form rulemaking.


   The Department finds that:

   (1)  Public notice of its intention to adopt the regulations encompassed by this order has been given under sections 201 and 202 of the act of July 31, 1968 (P. L. 769, No. 240)(45 P. S. §§ 1201 and 1202) and the regulations thereunder, 1 Pa. Code §§ 7.1 and 7.2.

   (2)  A public comment period was provided as required by law and all comments received were considered.

   (3)  The modifications that were made to the final-form rulemaking in response to comments received do not enlarge the purpose of the proposed regulations published at 32 Pa.B. 2468.

   (4)  The adoption of the final-form rulemaking in the manner provided in this order is necessary and appropriate for the administration of the authorizing statute.


   The Department, acting under authority of the authorizing statute, orders that:

   (a)  The regulations of the Department, 7 Pa. Code, are amended by adding §§ 106.1--106.12, 106.21--106.24, 106.41--106.48, 106.51--106.56, 106.61--106.66, 106.81--106.86, 106.101--101.112, 106.131--106.143 and 106.161--106.174 to read as set forth in Annex A.

   (b)  The Secretary of Agriculture shall submit this order and Annex A to the Office of General Counsel and to the Office of Attorney General for review and approval as to legality and form, as required by law.

   (c)  The Secretary of Agriculture shall certify this order and Annex A and deposit them with the Legislative Reference Bureau, as required by law.

   (d)  This order shall take effect upon publication in the Pennsylvania Bulletin.


   (Editor's Note:  For the text of the order of the Independent Regulatory Review Commission, relating to this document, see 32 Pa.B. 6428 (December 28, 2002).)

   Fiscal Note:  Fiscal Note 2-140 remains valid for the final adoption of the subject regulations.

Annex A








106.1.Program objectives.
106.4.Ineligible activities.
106.5.Program requirements.
106.6.Application submission and approval procedure.
106.7.Application evaluation criteria.
106.8.Processing of applications.
106.10.Right of recovery.
106.12.Contact information.


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