House Passes Tax Relief Package
Ranchers, farmers could see as much as $4 billion in benefits in first year
A $550 billion tax relief package aimed at boosting the economy and helping small businesses, farms and ranches passed the House today, putting into place many of the initiatives outlined in the President's economic stimulus package.
The Jobs and Growth Tax Reconciliation Act of 2003 (H.R. 2) passed by a vote of 222 to 203, and contains a number of provisions that USDA estimates will provide more than $4 billion in benefits to U.S. farmers and ranchers in the first year.
"This legislation will put much-needed benefits into producers' pockets," says Jay Truitt, executive director of Legislative Affairs, National Cattlemen's Beef Association (NCBA). "Any legislation that helps revitalize small businesses and family cattle operations is good for America."
More than 97% of all farms and ranches should be able to take advantage of either bonus depreciation or dramatic increases in expensing levels. Economists estimate that for most family operations, the changes in the code will significantly reduce the tax burden on those operations.
In addition, the House bill includes a 25% reduction in capital gains, from 20% to 15% in most tax brackets, and increases the Alternative Minimum Tax (AMT) exemption for couples by $15,000.
Provisions in H.R. 2 include:
Acceleration of 2001 Bush Tax Cuts for Individuals
- Child credit. Increases child credit to $1,000 for 2003 - 2005.
- 10% bracket. Accelerates the expansion of the 10% bracket for 2003 - 2005.
- Marriage penalty relief. Accelerates the expansion of the 15% bracket and the increase in the standard deduction for married persons filing joint returns for 2003 - 2005.
- Individual rate cuts. Accelerate the 2006 individual rate cut schedule to 2003. (Rates reduced from 28% to 25%; 31% to 28%; 36% to 33% and 39.6% to 35%.)
- Increase individual Alternative Minimum Tax (AMT) exemption amount. Increases the AMT exemption amount by $7,500 for single persons and $15,000 for joint filers for 2003 - 2005.
Business and investment incentives
- Bonus depreciation. Increases bonus depreciation from 30% to 50% and extends through December 31, 2005.
- Small business expensing. For 2003 through 2007, increases the amount the small businesses can expense (immediately deduct) from $25,000 to $100,000. Increases definition of small business from $200,000 of capital purchases to $400,000. Provisions are indexed for inflation.
- Net operating loss carryback. Extend the 5-year net operating loss carryback for three years (2003 through 2005) and hold taxpayers harmless for AMT.
Dividends and capital gains
- Dividend and capital gain tax rate reduction 5/15. Reduces the tax rate on dividends and capital gains to 5% for taxpayers in the lowest tax brackets and to 15% for all other taxpayers."
In the Senate, the Finance Committee passed a $350 billion dollar package late Thursday evening that included $433 billion in tax cuts and $85 billion in offsets. In another win for cattle producers, Sen. Craig Thomas (R-Wyo.) amended the final draft to include language similar to the Rancher HELP Act passed in the House, which would allow the sale of livestock due to drought to be exempt from capital gain penalties as long as the funds are reinvested within four years.
USDA Holds Listening Sessions on Country of Origin Labeling
USDA held listening sessions on the country of origin labeling issue in Kansas City, MO on May 6 and Kearney, NE on May 8. Other sessions are planned for: May 14 Orlando, FL; June 4 Cody, WY; June 6 Billings, MT; June 12 Sacramento, CA; June 19 Baton Rouge, LA; June 24 St. Paul, MN; June 26 Lancaster, PA. Meetings will be held 1:00p.m. 4:00p.m. local time. Producers are encouraged to attend. More information is available at http://www.ams.usda.gov/cool/.
Legal/Economic Study Refutes Anti-COOL Claims of USDA and Packers
New study finds COOL simple to implement with benefits far outweighing costs
A combined legal analysis and economic cost-benefit analysis released by five independent university agricultural economists and law professors has found mandatory country-of-origin labeling (COOL) relatively simple to implement and may cost less than 1/10th of a cent per pound of covered commodity, with a total cost range from $70 million to $193.43 million, a far cry from the USDA's $2 billion dollar estimate released in November 2002.
"Country of Origin Labeling: A Legal and Economic Analysis" co-authored by Drs. John VanSickle, Roger McEowen, C. Robert Taylor, Neil E. Harl, and John Connor addressed the legislative provisions, implementation and regulatory options, a benefits analysis, and a record keeping cost analysis of mandatory COOL. The comprehensive analysis relied on USDA-AMS's own statistics and methodology to propose workable, cost-effective COOL regulatory guidelines and a cost/benefit analysis.
For more information on this study click here.
Congress Sees Bi-partisan Support for Range Monitoring Funding
BLM and USFS need data for proper land management
The U.S. Forest Service (USFS) and Bureau of Land Management (BLM) need to have better data on activities on public lands such as livestock grazing to better support overall land management according to a letter sent by Reps. Mark Udall (D-CO) and Tom Udall (D-NM) to House Appropriations Committee leadership.
The letter to Rep. Charles Taylor (R-NC), Chairman of the House Subcommittee on Interior and Related Agencies, and Rep. Norm Dicks (D-WA), ranking Democratic member of the subcommittee, says that proper land management can be enhanced with information about grazing effects on the land's values and resources, and grazings relationship with other lawful uses of those lands.
"We think an important step to improving matters would be increased funding for short- and long-term monitoring of grazing allotments on public lands something that we understand is also supported by the livestock industry," the letter states, and says the funding "will enable the agencies to base their decisions on better information," and it will "enable the public to better understand the effects of grazing on the affected lands."
USMEF Web Site Completes Latest Round Of Improvements
Even though it's only a year old this month, the U.S. Meat Export Federation has announced that its highly successful Web site www.usmef.org has just completed another round of improvements to further increase its benefits.
A database of U.S. meat suppliers and international meat buyers from nearly 80 countries is at the heart of one of the most recent innovations. USMEF members are able to update their own "supplier" information at any time through the site, and these changes are reflected almost instantly. At the other end of the transaction, in-country USMEF staff verify and update international buyer information constantly to ensure U.S. suppliers can contact these qualified sales leads.
The USMEF Web site search engines quickly access the improved database to "Find U.S. Suppliers," or to "Find International Buyers." Searchers may select by market, species or even meat cut to find company names, contact information and other details. In addition, exporters and importers will find useful tools on these pages to help them succeed in international meat trade.
Another major change involves the site's 11 new "international market homes." Each home page provides detailed information about the market, USMEF forecasts of its potential and recent news about USMEF activities. In addition, a new customized right menu on each home page provides direct links to everything from general data about the country to current export statistics and requirements.
The site's library has been expanded and a variety of new materials are slated to be added to the already abundant resources during the next four to six months.
USDA Provides $53 Million to Farmers and Ranchers In 17 States to Help With Drought Recovery
Agriculture Secretary Ann M. Veneman today announced that 17 states will receive $53 million to help farmers and ranchers implement technologies and practices to conserve water and mitigate the long-term impacts of drought.
"These funds will help farmers and ranchers improve areas impacted by drought by employing sound conservation practices," said Veneman. "The USDA Drought Coordinating Council continues to monitor drought conditions to determine how resources can best be provided to those affected."
This money is available from USDA's Natural Resources Conservation Service (NRCS) through the Ground and Surface Water Conservation (GSWC) provision of the Environmental Quality Incentives Program (EQIP), authorized in the 2002 Farm Bill. States that receive these funds will provide cost-share and incentive payments to producers who undertake eligible water conservation activities, including irrigation improvements, conversion to less water intensive crops and dryland farming.
Though irrigated land can be found in all states, most of the irrigated acreage is concentrated in the West where the drought has hit the hardest. Because of chronic water supply problems in the West, federal financial and technical resources are being concentrated in key western watersheds.
In addition to the Klamath River Basin area of Oregon and California that has suffered from water shortages over the past several years, the High Plains Aquifer region also is a high priority for water conservation and water reduction activities. The following states will receive GSWC assistance: Arizona, California, Colorado, Idaho, Kansas, Montana, Nebraska, Nevada, New Mexico, North Dakota, Oklahoma, Oregon, South Dakota, Texas, Utah, Washington and Wyoming.
Funding is based on irrigated acres, surface water withdrawal in million gallons per day and groundwater withdrawal in million gallons per day. Conservation measures implemented must result in a net savings in groundwater or surface water resources in the agricultural operation of the producer. Net savings means a producer implements water conservation activities such as enhanced irrigation efficiencies, improved water storage measures or dryland farming. A state-by-state list of 2003 GSWC funding is attached.
EQIP is a voluntary conservation program that promotes environmental quality and assists producers to meet local, state and federal regulations.
EQIP funds help farmers and ranchers reduce soil erosion, improve water use efficiencies and protect grazing land by installing conservation practices that protect natural resources. EQIP funds nationwide can be used for water conservation purposes and to provide flexibility in addressing an array of environmental concerns.
For useful information on resources to address drought, visit http://disaster.usda.gov/. The new NRCS drought Web site provides links to the U.S. Drought Monitor, National Drought Mitigation Center and NRCS National Water and Climate Center. The page also contains ideas on water, land and crop management to consider while creating a drought plan and tips for stretching short water supplies. Additional information on the 2002 Farm Bill can be found at http://www.usda.gov/farmbill.
State-by-State List of EQIP Ground and Surface Water Conservation 2003 Funding