Farm Bill Extension – What Does It Mean?
By Stephen Frerichs
The majority of the authorities of the 2008 Farm Bill were extended through September 30, 2013 earlier this year as part of the American Taxpayer Relief Act of 2012. Direct and Counter-cyclical payments along with ACRE will continue for the 2013 crop year. Existing dairy support will continue as well. CRP sign-ups can once again take place. The extension, however, did not provide new funding for 37 programs for which there was no longer funding (baseline) under the 2008 Farm Bill. This includes the SURE program.
Administratively, UDSA must make some decisions in the near future about how to implement the extension. For example, under the 2008 Farm Bill authority farmers could make a one-time election to participate in ACRE. Will that decision cover the 2013 crop or will farmers be granted the ability to opt out of or into ACRE for the 2013 crop. Additionally, FSA must decide when to hold sign-ups for the commodity programs and whether to hold a general sign-up for CRP this year. All of these decisions are complicated by the fact that the general government is funded under a Continuing Resolution that expires in March 2013.
Politically, the 112th Congressional versions of the “new” Farm Bill are no longer relevant legislatively. Both the Senate and House Agriculture Committees, which now have new members, must start over in order to produce the next farm bill under regular order. That does not mean the ideas and reforms of the 112th congressional versions are not relevant; most certainly the 113th Congress will build on those ideas.
It is not at all clear when the Agriculture Committees will start the process of crafting a new bill. House Agriculture Committee Chairman Lucas initially indicated he’d like to start in February, but Ranking Member Peterson has indicated he sees no reason to do so unless House Republican Leadership guarantees floor time (see story below).
Senate Agriculture Chairwoman Stabenow would like to start in February as well, but she has a new Ranking member (Senator Cochran) to work with who will have to hire Committee staff, which takes time. Moreover, the entire farm bill process will be complicated by the upcoming debt ceiling debate which could include an effort to cut mandatory spending, including farm program spending. So it is quite possible that we won’t know whether a farm bill is started, let along completed in 2013 for quite some time.
Peterson Calls for House Republican Leaders to Commit to a New Farm Bill
By Stephen Frerichs
In letters to House Speaker John Boehner and Majority Leader Eric Cantor last week, House Agriculture Committee Ranking Member Collin C. Peterson, (D-MN), said that absent an assurance from Leadership, he does not see any reason for the House Agriculture Committee to again go through the process of writing a new five-year farm bill in the 113th Congress. Chairman Lucas has indicated he is willing to move a farm bill forward on a bipartisan basis only. So for now, the path forward in the House for the next farm bill is uncertain. A copy of Congressman Peterson’s letter to Speaker Boehner can be found here: http://democrats.agriculture.house.gov/inside/Pubs/01-03-2012%20Boehner%20Farm%20Bill.pdf
Senator Cochran to Take Senate Agriculture Committee Ranking Position
By Stephen Frerichs
Senator Thad Cochran (R-MS), asserted his seniority over Senator Pat Roberts (R-KS) to become the ranking member of the Senate Agriculture Committee in the 113th Congress. Senator Cochran was previously the ranking member on the Senate Appropriations Committee but was term-limited out of that position. The change in leaders will most certainly mean the commodity title of new farm bill will look different than the Senate passed version in the 112th Congress.
Select Tax Provisions of the American Taxpayer Relief Act of 2012
By Stephen Frerichs
The following is not intended to be a complete list of all of the tax provisions of the American Taxpayer Relief Act, but provides some of the highlights:
- Makes permanent the Bush-era income tax rates for couples with incomes of $450,000 and less (individuals with incomes of $400,000 and less), while raising the rate for higher incomes, respectively.
- Raises the estate tax rate from 35 percent to 40 percent on estates valued in excess of $5 million, making the new rate permanent.
- Raises capital gains tax rate from 15 percent to 20 percent for couples with incomes of $450,000 and more (individuals with incomes of $400,000 and more), making the new rate permanent.
- Makes permanent the alternative minimum tax (AMT) “fix” by again rolling it back and attaching a CPI inflator.
- Reauthorizes several tax extenders for one year:
- 50 percent bonus depreciation
- production tax credit
- research and experimentation tax credit
- biodiesel tax incentive ($1/gal) reinstated from January 1, 2012 through 2013
- ethanol tax incentives, including one for cellulosic ethanol and another for alternative fuel infrastructure
- wind production tax credit
- Payroll tax “holiday” is not extended.
New House Agriculture Committee Members
By Stephen Frerichs
Below are the new members of the House Agriculture Committee. Two vacancies remain for the Democrats.
Republicans: Frank Lucas, (OK), Chairman Bob Goodlatte (VA) Steve King (IA) Randy Neugebauer (TX) Mike Rogers (AL) Michael Conaway (TX) Glenn Thompson (PA) Bob Gibbs (OH) Austin Scott (GA) Scott Tipton (CO) Steve Southerland (FL) Rick Crawford (AR) Martha Roby (AL) Scott DesJarlais (TN) Chris Gibson (NY) Vicky Hartzler (MO) Reid Ribble (WI) Kristi Noem (SD) Dan Benishek (MI) Jeff Denham (CA) Doug LaMalfa (CA) Richard Hudson (NC) Rodney Davis (IL) Chris Collins (NY) Ted Yoho (FL)
Democrats: Collin Peterson (MN-7) Mike McIntyre (NC-7) David Scott (GA-13) Jim Costa (CA-16) Tim Walz (MN-1) Kurt Schrader (OR-5) Marcia Fudge (OH-11) Jim McGovern (MA-2) Suzan DelBene (WA-1) Gloria Negrete McLeod (CA-35) Filemon Vela (TX-34) Michelle Lujan Grisham (NM-1) Ann Kuster (NH-2) Rick Nolan (MN-8) Pete Gallego (TX-23) William Eynart (IL-12) Juan Vargas (CA-51) Cheri Bustos (IL-17) Sean Patrick Maloney (NY-18)
By Brian Rodgers, Manager of Federal Affairs, Appraisal Institute
If you’ve heard enough about the “Fiscal Cliff” to want to go over a cliff, let this summary of how H.R. 8, the “Fiscal Cliff” legislation will affect your appraisal business be the last thing you need to read about it. Among many other things, the legislation addresses:
- Estate tax: Estates would be taxed at a top rate of 40 percent, with the first $5 million in value exempted for individual estates and $10 million for family estates. In 2012, such estates were subject to a top rate of 35 percent.
- Deduction of mortgage insurance premiums: The bill retroactively extended this benefit to cover all of 2012, plus continues it through 2013. Qualified borrowers who pay private mortgage insurance premiums or guarantee fees on conventional, low down payment home loans, FHA, VA and Rural Housing mortgages will be able to write off those premiums along with their mortgage interest on federal tax returns. The retroactive feature is crucial because Congress had allowed this deduction to lapse at the end of 2011. There are limitations, however: The write-off is available only to borrowers who have an adjusted gross income below $110,000.
- Tax Credits: For energy-efficiency home improvements: This benefit provides modest tax credits of $200 to $500 for owners who install energy-efficient windows, insulation and other upgrades designed to cut energy consumption. The bill covers improvements made during 2012 and 2013. Tax credits for new energy-efficient new houses: This allows builders and contractors to claim a $2,000 tax credit on new homes constructed in 2012 and 2013 that meet federally specified energy-conservation standards. The bill also extends credits for U.S.-based manufacturers of energy-efficient refrigerators, clothes washers and dishwashers. As with other energy-related tax provisions, this had expired last year and will now be continued through 2013. •
- Charitable Deductions: The charitable deduction remains largely intact in the fiscal cliff agreement. However, it does bring back the “Pease Amendment,” which gradually reduces the value of itemized deductions against income exceeding $250,000 (or $300,000 for couples, up from $145,950 when it was last in effect). •
- Easements: Congress has passed a fiscal cliff deal that renews the enhanced income tax deduction for conservation easements through 2013, and retroactive to the beginning of 2012. •
- Farm Bill: The deal includes a one-year extension of the 2008 Farm Bill, through September 30. The Farm and Ranch Land Protection Program, which is the oldest and most widely utilized Farm Bill program, had already been renewed.
Problem solved? Well, only for now. This agreement merely averts wider tax increases and budget cuts scheduled to take effect with the new year. The measure would raise taxes by about $600 billion over 10 years compared with tax policies that were due to expire at midnight Monday. It would also delay for two months across-the-board cuts to the budgets of the Pentagon and numerous domestic agencies.
FDA Proposes New Food Safety Rules
The FDA specialty crop food safety proposed 547 page rule for some 300 fruits (including tree nuts) and vegetables will allow crop representatives 120 days to comment for their crop. FDA provided the same 120 days for fruit and vegetable food processors to review 680 pages and comment. The FDA task of attempting to assure the public of safe fruits and vegetables has resulted in two proposed rules of over 1,200 pages for crop and processing representatives to study and comment. Over two years, several crop representatives and processors have worked with FDA to reach a food safety objective.
To view a summary of the FDA proposed announcements for crop farmers and food processors, click here: http://www.fda.gov/Food/FoodSafety/FSMA/ucm334114.htm and here: http://www.fda.gov/Food/FoodSafety/FSMA/ucm334115.htm
Farmers are poised for a happy new year
Kiplinger Agriculture Letter
Farmers are poised for a happy new year as their national net worth swells past ’12’s record of $2.3 trillion, pushed up by soaring farmland values and by operating profits collecting in bank accounts. Demand for farm goods will be robust.
In the U.S. Average spending on groceries will rise nearly 4%, the same as in ’12, while spending on dining out may jump 10%. The recovering economy, population growth and inflation will each play a role. Copyright 2012. The Washington Kiplinger Editors, Inc. Log in to member resources to download the latest issue. http://portal.asfmra.org/Scripts/4Disapi.dll/4DCGI/cms/review.html?Action=CMS_Document&DocID=27&Time=820983562&SessionID=62057594yhofx712z58m6ib178uofz4n8xa01t8fypx92ywdh85706r0j6bv566f&MenuKey=123
Secretary Salazar Releases Colorado River Basin Study Projecting Major Imbalances in Water Supply and Demand
Secretary of the Interior Ken Salazar today announced the release of a study – authorized by Congress and jointly funded and prepared by the Bureau of Reclamation and the seven Colorado River Basin states – that projects water supply and demand imbalances throughout the Colorado River Basin and adjacent areas over the next 50 years. The Colorado River Basin Water Supply and Demand Study, the first of its kind, also includes a wide array of adaptation and mitigation strategies proposed by stakeholders and the public to address the projected imbalances.
The average imbalance in future supply and demand is projected to be greater than 3.2 million acre-feet by 2060, according to the study. One acre-foot of water is approximately the amount of water used by a single household in a year. The study projects that the largest increase in demand will come from municipal and industrial users, owing to population growth. The Colorado River Basin currently provides water to some 40 million people, and the study estimates that this number could nearly double to approximately 76.5 million people by 2060, under a rapid growth scenario. Information on a webinar presenting the Study results will follow in a separate email. The report and additional information on the Study can be found online at: www.usbr.gov/lc/region/programs/crbstudy.html. Additional information, questions, and/or comments on the Study may be directed to: Pam Adams e-mail: ColoradoRiverBasinStudy@usbr.gov phone: 702-293-8500 fax: 702-293-8418