|
Senate Finance Committee delivers farm bill fundingBut it still may not be enough to fund a growing 'wish list' 
The "on again, off again" negotiations to write the 2007 farm bill in the Senate may finally be "on" now that the Senate Finance Committee approved a whopping $16 billion package of new tax credits and revenues. The "Heartland, Habitat, Harvest and Horticulture Act" approved by the committee includes funding for permanent disaster assistance, tax credits to pay for several conservation programs, incentives for renewable energy and rural development, and dozens of other provisions. (See sidebar.) The package was designed to assist the Senate Agriculture Committee with what many viewed as a daunting task: Funding billions in new farm bill investments while living within a smaller budget baseline and meeting new "pay as you go" rules, which require Congress to find offsets for any new spending. Yet, most of the Finance Committee's package is already allocated to specific programs requested by Finance Committee members, eight of whom also serve on the Senate Agriculture Committee. Finance Committee Chairman Max Baucus (D-MT) and Sen. Kent Conrad (D-ND) got a $5.1 billion trust fund to provide "permanent" disaster assistance, Sen. Debbie Stabenow (D-MI) got provisions in that fund that would help specialty crop growers hard hit by pests and disease, and Sen. Ken. Salazar (D-CO) got a bigger tax credit for production of cellulosic ethanol. The list goes on and on. Senate Agriculture Committee Chairman Tom Harkin (D-IA) welcomed the help, but the approximately $3 billion that wasn't already allocated by the Finance Committee won't likely be enough to fund the Agriculture Committee's growing "wish list" for new spending. His task is still rather daunting. More money needed In the Senate Agriculture Committee, Chairman Harkin (D-IA) wants to invest more money in four basic areas: Nutrition programs, conservation, rural economic development and renewable energy. Plus, some of his fellow committee members want to raise loan rates and target prices. And specialty crop growers are just getting started; they won $1.6 billion in new programs in the House version of the farm bill. They'd like to see that number double in the Senate's version. To fund this ever-expanding list of new programs, Harkin was prepared to find about $4-$5 billion from existing programs, including direct commodity payments. But that type of cut created a big pushback from the nation's wheat growers, who rank maintenance of direct payments as one of their top priorities. Now the Agriculture Committee is expected to make across- the-board cuts of 2% to 3% on all outlays, excluding those for nutrition. "Almost everything is going to take a haircut," Sen. Kent Conrad told reporters after the Finance Committee meeting. Conrad said committee members "moved a lot" toward a new farm bill framework during a series of recent meetings; however, there are still some significant differences in areas like "the nature of reform," especially as it applies to payment limits, policy issues related to conservation and the amount of resources devoted to various titles. Conrad predicts that the Agriculture Committee will start writing a new farm bill the week of October 21, but no one is ready to mark their calendars just yet. Last week, the Agriculture Committee announced plans to start writing the new bill immediately after the Senate Finance Committee finished. Three hours later, the Agriculture Committee called the meeting off. Given the "on again, off again" nature of the discussions, the exact timetable is still anybody's guess. Summary of key farm and tax provisions Here is the summary of key farm and tax provisions approved by the Senate Finance Committee: --Permanent Agricultural Disaster Assistance Trust Fund: Creates a trust fund for disaster relief that would cover the "shallow losses" not covered by crop insurance. You must purchase crop insurance in order to be eligible for disaster assistance. Assistance will also be provided to specialty crop farmers whose trees, bushes and vines are lost due to a natural disaster. A new program under which USDA will conduct early pest detection and surveillance activities in coordination with the State Departments of Agriculture, will prioritize and create action plans to address pest and disease threats to specialty crops. --Conservation Reserve Program Tax Credits: Allows a participant in the Conservation Reserve Program (CRP), the Wetlands Reserve Program and Working Grasslands Protection Program, the option to choose between the regular cash payment and a tax credit. The tax credit will be equal to 100 percent of the value of the cash payment the participant would have otherwise received and the credit will be excludable from both income and self-employment taxes. --Tax Treatment of Conservation Reserve Program Payments: Provides that CRP payments to retired or disabled individuals are to be treated as rental payments for tax purposes and are therefore excluded from self-employment taxes. --Endangered Species Recovery Act: Establishes two new tax credits for taxpayers who take voluntary measures to aid in the recovery of species that are either listed as threatened or endangered under the Endangered Species Act (ESA) or deemed by the Secretary of Interior or Commerce to be warranted for protection under the ESA. It also establishes a tax deduction for the cost of actions to implement recovery plans under the ESA, and an exclusion from income tax obligations for payments received under various cost-share conservation programs. --Forest Bonds: Establishes a national program allowing the issuance of $1.5 billion in tax-exempt timber conservation bonds. The bonds must be issued by a non-profit organization with proceeds from the sale of bonds used for the acquisition of forest and forest lands that are subject to a conservation restriction. --Rural Renaissance Bonds: Creates a new category of tax credit bonds with a total allocation of $400 million for projects such as distance learning and telemedicine programs, rural telephone, broadband access and rural community facility projects. --Agricultural Business Security Tax Credit: Allows a retailer of agricultural products and chemicals or a manufacturer, formulator, or distributor of certain pesticides a business tax credit for 30% of costs for the protection of such chemicals or pesticides, including employee security training and background checks, installation of security equipment, and computer network safeguards. --Reduces the Recovery Period for Certain Farming Machinery and Equipment: Shortens the recovery period for certain farming business machinery and equipment to five years. --Broadband Technology and Infrastructure Tax Incentives: Creates a two-tiered tax incentive to stimulate new investment in broadband infrastructure. --Agricultural Bond Improvements: Increases the loan limit from $250,000 to $450,000 on Aggie Bonds, tax-exempt bonds that provide low-interest loans for first-time ranchers and farmers, and index the limit amount for inflation. It would also eliminate the dollar limitation in the definition of "substantial farmland." --Residential Wind Credit: Creates a new 30 percent personal credit for residential wind property, capped at $4,000 per year. --Transmission Pole Payment Exemption: Allows taxpayers who locate an electricity transmission pole on a line of 230 kilovolts or more to exempt easement payments received from the electric utility or electric transmission company from gross income. --Small Producer Credit for Cellulosic Alcohol: Creates a new production tax credit for cellulosic alcohol of 50 cents per gallon (in addition to the current 51 cents/gallon credit and 10 cents/gallon credit) for up to 60 million gallons of cellulosic fuel production in a taxable year. --Expand Expensing for Cellulosic Ethanol Facilities: Expands the eligible property qualifying for the 50 percent expensing to include alcohol produced from any lignocellulosic or hemicellulosic matter that is available on a renewable or recurring basis. --Small Ethanol Producer Credit: Extends for two years (through December 31, 2012) the 10 cent per gallon tax credit on the first 15 million gallons of ethanol production for producers with annual capacity of not more than 60 million gallons. --Fossil-Free Alcohol Production Credit: Creates a new small producer alcohol credit of 25 cents per gallon for facilities that produce ethanol through a process that does not use a fossil-based resource available through December 31, 2012. --Biodiesel Tax Credits: Extends for two years (through Dec. 31, 2010) the $1 and 50 cent production tax credits for biodiesel. Extends for four years (through Dec. 31, 2012) the 10 cent per-gallon tax credit on the first 15 million gallons of biodiesel production for producers with annual capacity of not more than 60 million gallons. Editor's note: Columnist Sara Wyant is president of Agri-Pulse Communications, Inc. and publishes a bi-weekly newsletter, Agri-Pulse, on food and farm policy. For more information, you can e-mail her at Agripulse@aol.com. 10/15/07 Date: 10/11/07
Copyright/Privacy
Copyright 1995-2008. High Plains Publishers, Inc. All rights reserved. Any republishing of these pages, including electronic reproduction of the editorial archives or classified advertising, is strictly prohibited. If you have questions or comments you can reach us at High Plains Journal 1500 E. Wyatt Earp Blvd., P.O. Box 760, Dodge City, KS 67801 or call 1-800-452-7171. Email: webmaster@hpj.com |
| |||||||||||||||||||||||
