$1.7 Trillion Omnibus Bill May Curb Syndicated Conservation Easement Abuse
The $1.7 trillion federal spending bill includes a change designed to curb the abuse of tax incentives for land conservation.
Federal conservation easements enable property owners to take a charitable deduction when they give up certain rights to develop land. The incentives, which were made permanent by Congress in 2015, help offset the owners’ financial loss for other potential uses for the property.
However, misuse of those deductions has been a persistent problem, whereby groups of investors may obtain inflated land appraisals and receive higher tax deductions.
The appropriations bill includes language that would put a stop to those abuses. The change is inspired by the Charitable Conservation Easement Program Integrity Act, which was first introduced in 2017. The original bill was introduced in the House by Reps. Mike Thompson, D-Calif., and Mike Kelly, R-Pa., and in the Senate by Sens. Steve Daines, R-Mont., Debbie Stabenow, D-Mich., and Chuck Grassley, R-Iowa.Read the Full Story
Recap of 2022's Top U.S. Ag Law Developments
The topic about which I have gotten the most questions and had the most presentation requests this year is carbon contracts. Currently, many agricultural producers around the nation are being approached by companies seeking to enter into contracts related to carbon credits.
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Essentially, the company agrees to pay a producer to undertake a production practice that is expected to increase the amount of carbon stored in the soil and/or reduce the amount of carbon emitted from the farm or ranch operations. The purchaser then typically sells any carbon credits generated from that land to a company seeking to offset its own carbon footprint.
For farmers, the most common practices under these contracts are cover crops or reduced to no-till farming. For ranchers, typically it is implementing a regenerative grazing practice that will be required by a carbon contract.
As with all contracts, the devil is in the details, and producers should carefully review any contract and work with an attorney to ensure the terms are understandable and agreeable. Equally important are for producers to carefully consider the economics of these contracts. Taking the time to determine the likely payout versus the likely expense to comply with the contractual terms is critical.
Virginia Farmer Creates Epic ‘Doll-Hay’ Tribute to Parton
Farmer Beth Bays has become famous in recent years in the Huddleston, Virginia, area for her hay bale sculptures — some of which she has parlayed into amazing music videos. Two years ago, it was a Willie Nelson classic; last year, it was the well-known theme from Peanuts. For Christmas 2022, Bays and a big group of people came together on a bitterly cold Christmas Eve to do a rendition of Dolly Parton’s song 9 to 5 in front of the “Doll-Hay” hay bale sculpture.
“Beyond grateful for everyone who braved the bitter cold to make this so much fun!!,” Bays said in a post announcing the premiere of the video, which can be found on TikTok and Facebook.Read the Full Story
California Taxes, Rules Are Killing Small Legal Weed Farms
When Johnny Casali was a teenager growing weed illegally in the mountains of Northern California, there was always the risk the government would ruin everything — that his plants would be discovered and ripped up, or that he would be discovered and locked up.
In the 1990s, dozens of federal agents raided his family’s Humboldt County farm, and Casali spent eight years in federal prison.
Today, weed is legal in the state and Casali grows it openly on his family farm. Law enforcement helicopters don’t fly over as often, and there’s not much risk of another raid.
Still, the government threatens his livelihood, Casali said.Read the Full Story
Kansas’ Drought Emergency Order to Remain in Place as Calendar Flips to 2023
The state of Kansas will enter the new year adhering to the October drought declaration issued by Gov. Laura Kelly covering all 105 counties.
Kelly’s order was based on a drought map that placed 67 counties on emergency status, assigned 11 counties to warning status and left 27 counties on watch status. Her action was in response to severe drought associated with a dry spring, hot summer and anticipated above-normal temperatures and below-normal precipitation throughout Kansas into December.
Connie Owen, director of the Kansas Water Office and chairwoman of the governor’s disaster response team, said conditions hadn’t changed sufficiently to warrant modification of the executive order issued Oct. 6.Read the Full Story
ASFMRA Government Relations Update
WOTUS Final Rule Published
The EPA and Corp of Engineers published a final rule
on December 30th, 2022 defining Waters of the United States (WOTUS) under the Clean Water Act. The agencies also released a fact sheet
. The rule takes effect 60 days after it is formally published in the Federal Register. Farm groups, such as the American Farm Bureau Federation have already publicly voiced concern
with the new rule and lawsuits will likely follow. The Supreme Court is reviewing EPA’s jurisdiction under the Clean Water Act, so this will not be the final WOTUS definition.117th Congress Adjourned
The 117th Congress is now adjourned. The 118th Congress will convene on January 3rd, 2023. One of the key items the press will be watching is the vote for House Speaker and whether Congressman Kevin McCarthy (R-CA) will receive enough Republican votes to take the Speaker’s gavel.
Before adjournment the House and Senate voted to pass the massive FY 2023 Omnibus Appropriation bill. The Senate voted 68 to 29
and the House followed with a vote of 225 to 201
. You can see how your members voted by clicking on the respective links.
Nine House Republicans voted for the bill in the House. Interestingly, most House members voted by proxy
(second column is the House member holding the proxy). A procedure the Democrats instituted in the House because of the coronavirus pandemic and one, the Republicans have vowed to do away with when they take the majority in 2023.
Also, in the waning days of the 117th Congress, the Senate approved two key Biden Administration agriculture trade nominations. Alexis Taylor was cleared to serve as USDA’s Undersecretary for trade and foreign agricultural affairs and Doug McKalip will serve as Chief Agriculture Negotiator at the Office of the U.S. Trade Representative (USTR). Both would have to have been renominated in the 118th Congress if not approved in the 117th.FY 2023 Omnibus Appropriation Bill
The massive bill
spends nearly $1.7 trillion, is 4155 pages long, and includes many non-appropriation items. In terms of the mundane Salaries and Expense Accounts for the Farm Production and Conservation Business Center (FPAC), Farm Service Agency (FSA), Risk Management Agency (RMA) and Natural Resource Conservation Service (NRCS) all received small increases in appropriations over FY 2022 (see table).
On page 122 General Provision 771 provides an additional $25 million in administrative and operating (A&O) funds for specialty crop contracts written in reinsurance year 2021. RMA will have to provide guidance to the approved insurance companies on how to pay this additional amount retroactively once the bill passes.
Starting on page 1860 the omnibus bill provides $3,741,715,000 for crop and livestock disaster payments for crop year 2022. Of that amount, $494,500,00 is for livestock. It also includes $995 million for the Emergency Watershed Protection Program.
Starting on page 2372 the bill includes language limiting the deductibility of charitable conservation easements. ASFMRA has supported this language as a broader coalition of conservation and appraisal organizations.
Starting on page 3909 (through page 3940) the Growing Climate Solutions Act (S. 1251) is included. The language directs USDA to establish a program to register entities that provide technical assistance to and verify the practices of farmers, ranchers, and foresters who participate in voluntary carbon markets with the goal of providing information and confidence to producers.
Starting on page 3940 is the SUSTAINS Act (H.R.2606) language. It allows the acceptance and use of private funds for Public-Private Partnerships: it also modifies existing authority for the Secretary of USDA to accept private donations to NRCS conservation programs by allowing the private donor the ability to direct how and where those funds would be used as well as give the Secretary of USDA the discretion on whether to match those funds with existing program funds.
Starting on page 3975 is $100 million for USDA to make payments to merchandisers of cotton that endured significant financial losses caused by pandemic-related supply chain challenges. Note this funding is from previously provided pandemic relief funds.
Starting on page 3977 is $250 million for USDA to make a one-time payment to U.S. rice producers who planted rice in 2022. This funding is offset with a recission from previous emergency ad hoc crop payments. The payments will be structured in part using actual production history (APH) for rice growers who have one (Page 3978).
language accompanying the bill (page 27) encourages RMA to provide an inflation adjustment for all A&O payments. This language is not binding, so RMA could choose to not implement it. RMA has previously determined it does not have the authority to provide an inflation adjustment.Representative David Scott Chosen as Ranking House Agriculture Committee Member
The House Democrats approved Ranking Committee members for the 118th Congress. Congressman David Scott (D-GA) will serve as ranking member of the House Agriculture Committee. He and Congressman G.T. Thompson (R-PA) have flipped positions as the Republicans take the majority. The Chair and Ranking Member of the Senate Agriculture Committee remain the same: Senator Stabenow (D-MI) and Boozeman (R-AR); as Congress begins to write the 2023 farm bill next year.
In Memory: Cary C. Matthews - Jonesboro, Arkansas
The ASFMRA was honored and pleased to welcome Cary Matthews, ARA, RPRA, into the membership in 2009. Cary joined the ASFMRA as an Associate and quickly obtained his Accredited Rural Appraiser (ARA) designation in 2012, followed by the Real Property Review Appraiser (RPRA) designation that he earned in 2015. He maintained his Accredited membership with the Society. Cary was an active member, serving the Mid-South Chapter in various roles, including as President in 2012-2013. He also served at the national level, where he sat on the Board of Directors from 2012 to 2019. He was currently serving as a member of the Appraisal Education/Accreditation Committee, and was previously a member of the Appraisal Review Committee in 2016-2017. Our thoughts and prayers are with his wife Julie and family. To read more on Cary’s life, click here