Legislative Action News, April 16, 2013

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President’s Budget Released
By Stephen Frerichs

Last week President Obama released his fiscal year 2014 budget request to Congress. The request includes detail for all of the U.S. Department of Agriculture’s appropriated budget accounts. In addition, the request includes proposals to change many of the USDA programs funded via the farm bill, rendering the budget proposal a “mini-farm bill”.  The table below highlights these changes to farm bill programs for the commodity, conservation and crop insurance titles.

Administration Request

Estimated 10 year Cost/ Savings

Eliminate Direct Payments, keep countercyclical, ACRE, and loan rate programs at current levels

-$30 billion

Cap Conservation Reserve Program enrollment at 25 million acres instead of current 32 million

-$2.2 billion

Extend livestock disaster assistance

$3 billion

Provide broader Gross Margin Dairy Protection

$1 billion

Additional funding to extend the Biomass Research and Development Initiative and the Rural Energy for America Program and provide funding for organics, specialty crops, and beginning farmers.

$1.3 billion

Cut crop insurers “ROI” from expected 14% of premium to 12%

-$1.2 billion

Reduce Administrative and Operating Payments to $.9 billion plus inflation

-$2.8 billion

Reduce farmer premium subsidy by 3 percentage points for policies subsidized by more than 50%

-$4.2 billion

Decrease farmer premium subsidy for harvest price option policies by 2 percentage points

-$3.2 billion

Reset CAT policy rates to reflect loss experience

-$292 million

Cap the Environmental Quality Incentives Program at $1.35 billion annually instead of $1.75 billion

-$4 billion

Cap annual Conservation Stewardship Program enrollment at 10.4 million acres annually instead of 12.8 million acres

-$2.2 billion

Create a new consolidated easement program (Farm and Ranchland, Grassland and Wetland Reserve Programs)

$2.4 billion


-$42.4 billion

 Some of these proposals are identical to what the House and Senate Agriculture Committees considered during its farm bill deliberations last Congress (consolidate easement programs, reduce CRP to 25 million acres).  However, Congress did not include any cuts to the crop insurance program, which the Administration proposed. Moreover, Congress sought to replace the elimination of the direct payment program with higher target prices (House) or a shallow-loss program (Senate).  Finally, the Administration is proposing significantly higher total cuts than Congress considered last year. For these reasons, Congress is likely to ignore most of the President’s budget request as it relates to farm bill programs except where the request mimics what Congress did (mostly conservation program changes) last year.

American Farm Bureau Federation Farm Bill Proposal
By Stephen Frerichs

The American Farm Bureau Federation (AFBF) released a Board of Directors approved set of recommendations for the farm bill last week, which provides a slightly new farm safety net approach than has been previously considered.  The proposal calls for the elimination of direct payments and a replacement offer for program crop producers of a choice between a Stacked Income Protection Plan (STAX) or higher target prices. All producers would continue to receive crop insurance and marketing loans under the AFBF proposal. 

The AFBF STAX concept is slightly different than what was included last year, which was for cotton only. STAX would be available for all program commodities plus apples, tomatoes, potatoes, grapes and sweet corn.  In addition, to keep costs down AFBF would reduce the premium subsidy to 70 rather than 80 percent; not offer a multiplier option, not offer a harvest price option, allow STAX to be based on yield or revenue at the discretion of the producer, and allow it only as a supplement to a buy-up policy with a 10-25 percent deductible rather than also providing for a stand-alone policy.  So far Congressional agricultural leaders have not responded publically to the proposal. If you like to read the full AFBF proposal click here: http://farmpolicy.com/wp-content/uploads/2013/04/farmbill-fbpos13a0408.pdf

WRDA ready for Senate floor action
FBNews – American Farm Bureau Federation

Passed unanimously by the Senate Environment and Public Works Committee, the Water Resources Development Act could be up for a vote on the Senate floor as early as this month. Action in the House is expected to follow this summer.
Learn more about the WRDA: http://fbnews.fb.org/Templates/Article.aspx?id=36337

Individual tax code reform a must for farmers, ranchers
FBNews – American Farm Bureau Federation

With more than 96 percent of farms and 75 percent of farm sales taxed under IRS provisions for individual taxpayers, as congressional lawmakers consider tax reform they must address the individual tax code and not focus exclusively on corporate tax provisions, according to Farm Bureau. Further, the new tax code should be simple, transparent, revenue-neutral, and fair to farmers and ranchers.
Read more about tax reform for farmers & ranchers: http://fbnews.fb.org/FBNews/Special_Report/Individual_tax_code_reform_a_must_for_farmers,_ranchers.aspx

State Legislative Appraisal News
By Bill Garber

Georgia Board Addresses ‘Evaluation Appraisal’
The Georgia Real Estate Appraisers Board has published regulations regarding standards for developing and reporting an “evaluation appraisal.” The regulations clarify that, where permitted by federal law and policies, a state-licensed or certified appraiser performing an evaluation appraisal need not comply with the Uniform Standards of Professional Appraisal Practice. The rules officially were adopted March 18 and may be found here: https://www.grec.state.ga.us/PDFS/About/Table%20of%20Contents%20539-3-.04.pdf

Kentucky Enacts AMC Legislation
Kentucky has enacted legislation to create a new appraisal management company recovery fund to replace its current surety bond requirement. The recovery fund is supported by an annual surcharge of up to $800 on each AMC registered in the state. The fund has a cap of $300,000, at which point the surcharge will be suspended until the fund needs to once again be replenished. The Kentucky Real Estate Appraisers Board will establish procedures for making claims against the fund and will administer the funds in order to provide restitution to licensed or certified real property appraisers who have suffered pecuniary harm by an AMC. Appraisers will also be able to seek reimbursement for “reasonable and appropriate court costs.” The bill may be viewed here.

Wyoming Legislation Will Regulate, Register AMCs
Wyoming has enacted legislation that requires the regulation and registration of appraisal management companies. The Wyoming Appraisal Management Company Registration and Regulation Act includes an amendment that exempts some professionals from registering as an AMC, including attorneys, certified public accountants, financial advisors, insurance agents, real estate brokers and other professionals who request an appraisal of the client’s property on behalf of the client. The Wyoming and Western South Dakota Chapter of the Appraisal Institute helped negotiate the contents of the bill. The chapter worked with the Wyoming Certified Real Estate Appraiser Board, the Wyoming Chapter of the American Society of Farm Managers and Rural Appraisers, and many other stakeholders for two years to help pass this bill. The Act takes effect July 1, 2013. Read more about this act: http://legisweb.state.wy.us/2013/Introduced/HB0026.pdf
AMC State Legislation Update
Thirty-six states have enacted appraisal management company registration and regulation legislations: Alabama, Arizona, Arkansas, California, Colorado, Connecticut, Florida, Georgia, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maryland, Michigan, Minnesota, Mississippi, Missouri, Montana, North Dakota, Nebraska, New Hampshire, New Mexico, North Carolina, Nevada, Oklahoma, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Utah, Vermont, Virginia, Washington and Wyoming.
Legislation is pending in four states: Massachusetts, New Jersey, South Carolina and West Virginia.

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