Finding compromise in Washington was once a hallmark of House and Senate agriculture committees but in today’s political climate that path is not clear.
Much of the recent oxygen is being devoted to a $3.5 trillion plan, and how it will be paid for is on the minds of House and Senate members in rural areas. The landscape includes everything from renewable fuels to tax policy.
Rural lawmakers have been reluctant to embrace tax policy that hurts farmers and ranchers who want to be able to transition their operation from one generation to the next.
The “step-up in basis rule” proposed by President Joe Biden in his American Families Plan does not seem to have the bipartisan support it needs to pass, according to William “Bill” Glazner, a certified public accountant with Kansas-based Adams Brown CPAs. Stepped-up basis has helped Americans who want to preserve their estate and help their heirs continue to run the family business and farm. Biden’s proposal would change how the capital gains taxes are paid on estates, and if approved by Congress it would change how the basis is defined and could significantly add to the heirs’ costs.
John Linder, president of the National Corn Growers Association, said, “We are very pleased to see that the House Committee did not include the elimination of stepped-up basis within its initial text. However, we are concerned with the provisions on the estate tax in the committee draft that could impact family farms. NCGA will continue to work to preserve stepped-up basis and the current estate tax exemption as this process moves forward.”
U.S. Rep. Tracey Mann, a Kansas Republican, was disappointed that the House Agriculture Committee in its discussions did not directly address his amendment to stop it in its current state in legislation.
“The legislation would preserve the tax code’s stepped-up basis provision in the $3.5 trillion budget blueprint, exempting agriculture producers from paying capital gains taxes on the full appreciation of inherited land or equipment when it passes from one generation to the next,” Mann said. “We must protect our family farms and honor those who feed, fuel, and clothe all of us. The stepped-up basis is essential to the future of agriculture as we know it in Kansas and across the country, and I will do everything possible to ensure it is preserved.”
Ag support of the Build Back Better Act
U.S. Rep. Cindy Axne, an Iowa Democrat, voted to approve the House Agriculture Committee’s portion of the Build Back Better Act, which includes provisions she fought for to support biofuel infrastructure and rural business owners. Linder said he appreciated her vote and others.
“Family farms produce crops that feed Americans and provide consumers with affordable and environmentally friendly fuel. We are grateful to the House Agriculture Committee for including funding for biofuels infrastructure in its bill and thank Reps. Axne, Angie Craig and Cheri Bustos, along with Chairman David Scott, for their leadership. Greater market access for higher blends of ethanol deploys more low-carbon fuels while supporting rural economies. As the country works to meet the president’s ambitious climate goals, ethanol is the solution we need now.”
The legislation approved includes $18 billion in rural job-promoting investments through U.S. Department of Agriculture Rural Development and an additional $7.75 billion to support agriculture research and infrastructure, Axne said.
“From investments in our rural businesses to key infrastructure funding to promote biofuels and other clean energy sources, this section of the Build Back Better Act will support Iowa’s communities and chart a path to a cleaner environment for both ourselves and our children,” Axne said.
The bill specifically includes $1 billion to support expanded biofuel infrastructure, a key Axne priority, and $400 million for loan relief for rural borrowers, originally proposed by Axne through her Rural Equal Aid Act.
The biofuels infrastructure funding will allow the U.S. Department of Agriculture to provide grants over the next eight years to expand biofuel pump infrastructure, upgrade existing tanks and pumps, and increase usage of higher blends of ethanol and biodiesel.
The bill also includes:
• $4 billion for a new Rural Partnership Program to aid small rural communities in community and economic development;
• $3.65 billion for research facilities, such as land-grant universities like Iowa State University, to ensure the U.S. is not outspent in agricultural research and infrastructure development; and
• $2.6. billion for the Rural Energy for America Program to provide grants to farmers and small businesses for energy efficiency upgrades on their operations.
The Agriculture Committee’s section of the Build Back Better Act will be added with sections approved by other committees to be compiled by the House Budget Committee later this month before advancing to the House floor for final approval.
“While I am still withholding my final decision on this package until I see the full bill, seeing these investments included will be a critical part of my choice,” Axne said.
Sen. John Boozman, R-AR, Ranking Member of the Senate Committee on Agriculture, Nutrition, and Forestry, voiced his disappointment in a statement.
“The House Agriculture Committee’s disastrous mark-up was a snapshot of all that is wrong with this partisan process,” Boozman said. “House Democrats hastily slapped together a bill that left $28 billion in conservation funding unaccounted for—and thus without debate or potential amendments. I am not sure how you can do that.”
How large the bill will be depends on the Senate. It is expected that all Republicans will oppose the measure and several rural Democrats have also expressed concern over the bill’s price tag.
Dave Bergmeier can be reached at 620-227-1822 or [email protected].
