Legislative Action News, April 8, 2014

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Farm Bureau Reaction to EPA/ Army Corps Clean Water Proposed Rule

The Environmental Protection Agency (EPA) and U.S. Army Corps of Engineers (Army Corps) jointly released a proposed rule to clarify protection under the Clean Water Act for streams and wetlands. The proposed definitions of waters will apply to all Clean Water Act programs. It does not protect any new types of waters that have not historically been covered under the Clean Water Act and is consistent with the Supreme Court’s more narrow reading of Clean Water Act jurisdiction according to an EPA press release.

The American Farm Bureau Federation was quick to dispute the EPA press release. In its own press statement, AFBF said:

“The EPA proposal poses a serious threat to farmers, ranchers and other landowners. Under EPA’s proposed new rule, waters – even ditches – are regulated even if they are miles from the nearest ‘navigable’ waters. Indeed, so-called ‘waters’ are regulated even if they aren’t wet most of the time. EPA says its new rule will reduce uncertainty, and that much seems to be true: there isn’t much uncertainty if most every feature where water flows or stands after a rainfall is federally regulated.

Under this proposed rule, farmers, ranchers and every other landowner across the countryside will face a tremendous new roadblock to ordinary land use activities. This is not just about the paperwork of getting a permit to farm, or even about having farming practices regulated. The fact is there is no legal right to a Clean Water Act permit – if farming or ranching activities need a permit, EPA or the Army Corps of Engineers can deny that permit. That’s why Clean Water Act jurisdiction over farmlands amounts to nothing less than federal veto power over a farmer’s ability to farm.”

See last week’s ASFMRA E-News for more information and links to the EPA/ Corps rule: http://www.asfmra.org/ag-news/ag-news-april-1-2014/#

USDA Announces Continuation of Certain Farm Programs

In a Federal Register notice USDA announced the continuation for 2014 of the Marketing Assistance Loans (MAL), Loan Deficiency Payments (LDP), Noninsured Crop Disaster Assistance Program (NAP), Sugar Program, Milk Income Loss Contract Program (MILC), and Dairy Indemnity Payment Program (DIPP). The notice states that FSA will issues regulations to implement the changes to these programs, if any, as required by the Agricultural Act of 2014. The notice also lays out that farmers must annually submit acreage reports of all cropland on the farm to the FSA as a condition of eligibility for all commodity program and marketing loan program benefits. Loan rates were announced separately last week by FSA here: http://www.fsa.usda.gov/FSA/newsReleases?area=newsroom&subject=landing&topic=ner&newstype=newsrel&type=detail&item=nr_20140328_rel_0053.html

Finally the notice spells out more directly the new AGI test for FSA and NCRS programs. Producers whose total (farm plus nonfarm) average AGI for the 3 tax years preceding the most recent complete tax year exceeds $900,000 are not eligible to receive benefits from most programs administered by FSA and NRCS. Previous average AGI provisions specified in the 2008 Farm Bill had different eligibility limits for certain programs based on average farm AGI and, for some programs, on average nonfarm AGI. The AGI and payment limit eligibility restrictions from the 2014 Farm Bill apply to the 2014 crop, fiscal, or program year for payment limits which encompass the 2010, 2011, and 2012 tax years for purposes of calculating the average AGI, and will be implemented immediately.

A copy of the notice can be found here: http://www.gpo.gov/fdsys/pkg/FR-2014-03-28/pdf/2014-06991.pdf

You can also read a copy of the USDA farm bill implementation plan submitted to the House Agriculture Committee last week during Secretary Vilsack’s testimony to the Committee on the State of the Rural Economy here: http://agriculture.house.gov/sites/republicans.agriculture.house.gov/files/pdf/hearings/Progress_AgriculturalAct2014Implementation.pdf  

Senate Clears Tax Extender Bill

The Senate Finance Committee approved a tax extenders bill last week via voice vote. The legislation includes A $1 per gallon tax credit for biodiesel, as well as the small agro-biodiesel producer credit of 10 cents per gallon at an estimated cost of $2.6 billion over 10 years. It also includes an extension of tax incentives for charitable contributions of conservation easements as well as other important provisions for agriculture including section 179, bonus depreciation, and wind power tax credits. The schedule for consideration of the bill on the Senate floor has not yet been set. Nor is it clear how the House will proceed. A copy of the Senate Finance Committee’s summary is here (follow to “Summary of Modified Chairman’s Mark):

http://www.finance.senate.gov/legislation/details/?id=67094f10-5056-a032-52ff-257830e0a938

An important step in extending the tax incentive

The Senate Finance Committee voted on April 3rd to extend a key tax incentive for landowner-led conservation efforts for 2014 and 2015. The conservation provision, first enacted by Congress in 2006 and extended several times before, expired at the end of 2013, and extending it has been a priority for the Land Trust Alliance. Donations of conservation easements had increased to one million acres a year under the provision, which enables farmers, ranchers, forestland owners and other modest-income landowners to receive a meaningful tax benefit for their very valuable donations.

FSA is requesting comments on AD – 2047 Customer Data Worksheet

FSA is requesting comment on the form AD–2047, ‘‘Customer Data Worksheet Request for SCIMS Record Change.’’ FSA is using the collected information in support of documenting critical producer data changes (customer name, current mailing address and tax identification number) in SCIMS made at the request of the producer to correct or update their information.  Comments are due by May 19, 2014. The Federal Register notice seeking comments can be found here: http://www.gpo.gov/fdsys/pkg/FR-2014-03-19/pdf/2014-06001.pdf

Fannie Mae Releases New Guidelines for Rural Appraisals

By Bill Garber – Fannie Mae released new guidelines for appraising rural properties March 25, and at the same time clarified its policy on using appraisal management companies.

In releasing the guidelines, Fannie noted that it recognizes how properties in low-population areas can present appraisers with special challenges due to unusual building types, distances between properties, large lot sizes that may include farmland and nonpublic utility sources.

“Qualified appraisers who understand the characteristics of these markets are key to ensuring compliance with Fannie Mae property eligibility and appraisal requirements,” the government-sponsored enterprise stated in the guidelines, Lending Letter LL-2014-02.

The GSE also noted that in rural areas, small lenders often lack sufficient staff to maintain a separation between the loan production and appraisal processes, leading them to rely on AMCs to comply with Fannie’s appraisal requirements.

However, the guidance stated, “Lenders are not required to use an AMC or any other third-party vendor to order appraisals.” It also noted that lenders can use in-house appraisers so long as their function is independent of loan production staff, and they also may hire independent fee appraisers.

View Fannie Mae’s guidance for rural appraisals: https://www.fanniemae.com/content/announcement/ll1402.pdf

Agencies Issue Proposed Rule on Minimum Requirements for Appraisal Management Companies

WASHINGTON— Six agencies today issued a proposed rule that would implement minimum requirements for state registration and supervision of appraisal management companies (AMCs). An AMC is an entity that serves as an intermediary between appraisers and lenders and provides appraisal management services. 

In accordance with section 1124 of Title XI of the Financial Institution Reform, Recovery, and Enforcement Act of 1989, as added by section 1473 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the minimum requirements in the proposed rule would apply to states that elect to establish an appraiser certifying and licensing agency with the authority to register and supervise AMCs. 

The proposed rule would not compel a state to establish an AMC registration and supervision program, and there is no penalty imposed on a state that does not establish a regulatory structure for AMCs.  However, an AMC is barred by section 1124 from providing appraisal management services for federally related transactions in a state that has not established such a regulatory structure.

Under the proposed rule, participating states would require that an AMC:

  • Register in the state and be subject to its supervision;
  • Use only state-certified or licensed appraisers for federally related transactions, such as real estate-related financial transactions overseen by a federal financial institution regulatory agency that require appraiser services;
  • Require that appraisals comply with the Uniform Standards of Professional Appraisal Practice;
  • Ensure selection of a competent and independent appraiser; and
  • Establish and comply with processes and controls reasonably designed to ensure that appraisals comply with the appraisal independence standards established under the Truth in Lending Act.

The proposed rule also would require that the certifying and licensing agency of a participating state have certain authorities, including the authority to:

  • Approve or deny initial AMC registration applications and applications for renewals; 
  • Examine the AMC and require the AMC to submit relevant information to the state; 
  • Verify that the appraisers on the AMC’s appraiser network or panel hold valid state certifications or licenses; 
  • Conduct investigations of AMCs to assess potential violations of appraisal-related laws; 
  • Discipline an AMC that violates appraisal-related laws; and
  • Report an AMC’s violation of appraisal-related laws, as well as disciplinary and enforcement actions, and other pertinent information about an AMC’s operations to the Appraisal Subcommittee of the Federal Financial Institutions Examination Council. 

The proposed rule would provide participating states 36 months after its effective date to implement the minimum requirements.  An AMC that is a subsidiary of a financial institution and regulated by a federal financial institution regulatory agency is required by section 1124 and the proposed rule to meet the same minimum requirements as other AMCs, although such an AMC is not required to register with a state.  In conjunction with the proposal, the Federal Deposit Insurance Corporation is proposing to rescind appraisal regulations promulgated by the former Office of Thrift Supervision (OTS).  The OTS appraisal regulations are duplicative of the FDIC’s appraisal regulations in Part 323.  Similarly, in a separate rulemaking, the Office of the Comptroller of the Currency is rescinding appraisal regulations promulgated by the former OTS.  The proposal is being issued jointly by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Consumer Financial Protection Bureau, the Federal Housing Finance Agency, and the National Credit Union Administration. The Federal Register notice is attached. The agencies are seeking comments from the public on all aspects of the proposal.  The public will have 60 days to review and comment on the proposal and the proposed Paperwork Reduction Act analysis.  Publication of the proposal in the Federal Register is expected shortly.

Media Contacts OCC Stephanie Collins (202) 649-6870 Federal Reserve Susan Stawick (202) 452-2955 FDIC Greg Hernandez         (202) 898-6984 CFPB Sam Gilford         (202) 435-7673 FHFA Corinne Russell         (202) 649-3032 NCUA Ben Hardaway            (703) 518-6333

Related Link • Proposed Rule: http://www.occ.gov/news-issuances/news-releases/2014/2014-ia-42a.pdf (Pages 2 – 8 detail how to communicate with the various agencies who authored the document.)

Agricultural Tax Reform

Federal Produce Policy – April 03, 2014 – The long awaited tax reform legislation promised by Congressman Dave Camp (R.-Mich.), Chairman, House Committee on Ways and Means, was released as a draft bill but not introduced.  While the concerns of specialty crops with reference to the removal of cash accounting and replaced with accrual accounting was not included in the Camp draft bill, other agricultural tax provisions could change how specialty crops and other ag entities will report their income.

To view a section-by-section summary of the draft bill, click here: http://waysandmeans.house.gov/uploadedfiles/ways_and_means_section_by_section_summary_final_022614.pdf

To view an article from The New York Times, click here: http://www.nytimes.com/2014/04/02/business/tax-lobby-works-to-defeat-overhaul-it-once-cheered.html?hpw&rref=us&action=click&module=Search&region=searchResults%230&version=&url=http%3A%2F%2Fquery.nytimes.com%2Fsearch%2Fsitesearch%2F%3Faction%3Dclick%26contentCollection%3DPolitics%26region%3DTopBar%26module%3DSearchSubmit%26pgtype%3Darticle%23%2Ftax%2Breform%2Bcamp%2Fsince1851%2Fallresults%2F1%2Fallauthors%2Fnewest%2F

In Memory – Carl R. Baldus, Jr., ARA LaPlata, MD

The ASFMRA was honored to welcome Carl into the membership in 1960. He obtained his Accredited Rural Appraiser (ARA) designation and went to the Accredited membership classification in January 1973. Carl was very active in the Society and remained involved in programs and activities offered through the organization. Carl served on several Committees including: Appraisal Review in 1984, Membership from 1986 to 1988, and Government Relations from 1991 to 1995. He was also active on the Chapter level and served as the Northeast Chapter Alternate Director for 2006-2007. Carl and his wife Bobbie, attended numerous ASFMRA Annual Meetings missing only a few. They were both very strong supporters of the Education Foundation. For several years, they donated a stay at their condo as an Auction item and Bobbie participated in raising funds for the Auction through various fundraising activities for a number of years. Carl passed away on March 26, 2014. He will be missed by many. Our thoughts and prayers are with Bobbie and the family. The obituary may be viewed here: http://www.arehartechols.com/obits/obituary.php?id=460538

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