Omnibus, tax extenders provide some presents for ag

Santa didn't give agriculture everything it wanted in omnibus and tax extenders, but some familiar riders again included.

Jacqui Fatka, Policy editor

December 16, 2015

4 Min Read
Omnibus, tax extenders provide some presents for ag

The long-awaited omnibus spending bill and tax extenders package were released late Tuesday night, giving a look at what lobbyists were able to win in the ongoing discussions of recent weeks over riders, funding levels and tax extensions. The House could vote as early as Thursday on the deals.

On the spending level, the omnibus bill provides $21.75 billion in discretionary funding for agriculture appropriations – $925 million above the fiscal year 2015 enacted level and $34 million below the President’s budget request.

Within the agriculture research budget, the bill includes $350 million for the Agriculture and Food Research Initiative for competitive agricultural research grants and $212 million to rehabilitate high-priority ARS facilities.

The Animal and Plant Health Inspection Service received a $23 million increase this year’s levels to support increases to fight highly pathogenic avian influenza and citrus greening. The Food Safety Inspection Service also saw a boost of $3.3 million above the president’s request, although $1.6 million below this year’s levels.

Policy riders

The legislation includes several policy provisions including a mandatory country of origin labeling repeal for certain meat products (see related story.) However, big tickets items such as a roll-back of the Environmental Protection Agency’s waters of the U.S. rule and pre-empting state biotech food labeling laws were not included.

The final deal does include a provision that provides grocery stores and food retailers regulatory relief by providing them a year or more in complying with the menu labeling regulations. A provision amends Food and Drug Administration policy relating to the regulatory treatment of trans fat liability until FDA’s near-ban on the substance goes into effect.

Legislators continued to weigh in on school lunch standards by requiring flexibility to local schools to implement whole grain lunch standards if the school can demonstrate a hardship when procuring whole grain products. It also blocks future sodium restrictions under the program until there’s more scientific research to back the limits.

The Dietary Guidelines are set to be released any day, and although the impact of them is unknown, legislators wanted to ensure that they remain based on “significant scientific agreement and are focused on nutritional and dietary information.” Reports have criticized the inclusion of environmental and sustainable considerations and the provision requires a review of the guidelines process to ensure a balanced and scientific process in the future.

The bill does ban horse slaughter in the U.S., which has become a common rider in these omnibus bills.

Tax extenders

Also on Tuesday, Senate Finance Committee chairman Orrin Hatch (R., Utah), House Ways and Means Committee chairman Kevin Brady (R., Texas), and Senate Finance Committee ranking member Ron Wyden (D., Ore.) announced a bipartisan, bicameral deal on legislation to provide permanent tax relief and lay the groundwork for what they hope will be broader tax reform going forward.

Brady said, “Businesses will also be able to invest with confidence in new equipment, research and jobs to grow the local economy. This bill is an important piece of our plan to replace our broken tax code with a simpler, fairer system that actually works for the American people.”

Earlier this year, the Senate Finance Committee reported out a bipartisan tax extenders package that extended provisions to assist families, individuals and small businesses for two years. The House Ways and Means Committee advanced several tax bills that would make permanent a number of policies, like incentives for innovative research and development, among others.

The PATH Act includes a number of bipartisan legislative policies that were advanced by the two tax writing committees through open process and debate.

As for the Section 179 business deductions, the bill allows for deduction for capital expenses, including equipment like tractors, to be permanently capped at $500,000, instead of $25,000; and the 50% bonus depreciation provision would be extended for five years.

The tax bill extends through 2016 the existing $1.00 per gallon tax credit for biodiesel and biodiesel mixtures, and the small agri-biodiesel producer credit of 10 cents per gallon. The provision also extends through 2016 the $1.00 per gallon production tax credit for diesel fuel created from biomass. The provision extends through 2016 the fuel excise tax credit for biodiesel mixtures.

Biodiesel producers welcomed the extension, but had been lobbying for a change that would only apply to domestic producers. By narrowing the scope of the credit to domestic production, the producer’s incentive would save some $90 million as currently companies in Argentina, Asia and Europe are able to also receive the blenders credits, according to the Joint Committee on Taxation.

The tax extenders deal includes the America Gives More Act, which will make permanent an oft-renewed temporary incentive for land conservation. Securing permanency for this incentive is something the Land Trust Alliance has sought for a decade and it will have a major impact on future conservation, the group said.

About the Author(s)

Jacqui Fatka

Policy editor, Farm Futures

Jacqui Fatka grew up on a diversified livestock and grain farm in southwest Iowa and graduated from Iowa State University with a bachelor’s degree in journalism and mass communications, with a minor in agriculture education, in 2003. She’s been writing for agricultural audiences ever since. In college, she interned with Wallaces Farmer and cultivated her love of ag policy during an internship with the Iowa Pork Producers Association, working in Sen. Chuck Grassley’s Capitol Hill press office. In 2003, she started full time for Farm Progress companies’ state and regional publications as the e-content editor, and became Farm Futures’ policy editor in 2004. A few years later, she began covering grain and biofuels markets for the weekly newspaper Feedstuffs. As the current policy editor for Farm Progress, she covers the ongoing developments in ag policy, trade, regulations and court rulings. Fatka also serves as the interim executive secretary-treasurer for the North American Agricultural Journalists. She lives on a small acreage in central Ohio with her husband and three children.

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