Late last week Congress continued its scramble of year-end work to pass important legislation before adjourning until after the first of the year.
On Friday, Congress passed Protecting Americans from Tax Hikes (PATH), a bill that includes two important provisions affecting farmers. The bill includes a Section 179 provision that will permanently allow a business to expense up to $500,000, up from a limit of $25,000. The $500,000 limit is reduced dollar for dollar after expenditures reach $2 million. The provision also would index both the $500,000 and $2 million limits for inflation beginning in 2016.
The PATH Bill also extends the existing bonus depreciation for the purchase of new capital assets for another 5 years at 50% for 2015-2017, 40% in 2018 and 30% in 2019. President Obama signed the legislation later on Friday afternoon.
“These tax provisions allow farmers to reinvest in their operations — and that has a ripple effect across the entire agriculture industry and rural communities,” said Chip Bowling, National Corn Growers Association president.
In addition, the House passed the FY 2016 Omnibus Appropriations Bill with a vote of 316-113 and the Senate followed suit passing the bill 65-33. The measures in the legislation included:
- Country of Origin Labeling (COOL) was retained for the lamb industry while it repealed the meat labeling provision for beef and pork.
- Language rejecting the President’s budget request regarding the termination of research programs, redirection of research programs or closure of research locations, to include the U.S. Sheep Experiment Station, were written into the bill.
- Language that would prohibit funding for the U.S. Fish and Wildlife Service to issue rules to place the Greater Sage Grouse on the endangered species list.
- Funding for compensation to ranchers who experience livestock loss due to wolf depredation.
With regard to COOL, the legislation addresses the cases from Canada and Mexico through the World Trade Organization, which ruled that the labeling program violated U.S. international trade obligations, discriminating against Canadian and Mexican livestock sent to the United States to be fed out and processed. The decision authorized Canada and Mexico to put retaliatory tariffs on U.S. goods going to those countries — the No. 1 and No. 2 U.S. export markets. The WTO set the retaliation level at $1 billion annually.
Language in the omnibus bill repeals the labeling provision for beef and pork, thus avoiding retaliation. There is significant support from agriculture with the COOL repeal, but also disappointment from some organizations.
“Congress had a solution to make COOL compliant with our WTO obligations sitting on their desks for 5 months,” said Roger Johnson, National Farmers Union president. “Instead, they gave in to demands to completely remove most aspects of COOL for meat that provided meaningful information to the pubic. This is the type of legislative hocus pocus that has angered so many Americans.”
There were some additional issues not included in the legislation, however, that are sources of concern in agriculture.
“America’s farm and ranch families will benefit greatly from the strong, bipartisan congressional passage of important tax relief, funding and policy provisions. The legislation provides needed changes to tax policy, funding for programs important to farmers, ranchers and rural communities, and actions related to COOL to prevent retaliation against U.S. agricultural products,” said Bob Stallman, president of the American Farm Bureau. “While we know there were tough decisions made to secure enough votes for this very important package, we will continue pushing for action on those items that Congress did not include. We need national policy on GMO labeling that is based on science and does not allow a patchwork of confusion that would be created by state and local laws. We will also continue to work with Congress to send the Environmental Protection Agency’s onerous Waters of the U.S. rule back to the drawing board. Those two items are big pieces of unfinished business that America’s farmers and ranchers need as they work to produce food and fiber for our nation.”