KARA Testifies Before Governor’s Blue Ribbon Funding Task Force on Water Resource Management

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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.

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 industry 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, however, 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 commercial 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.