Policy Updates and Issue News March 2018

Congress is on a two-week Easter recess until April 9.  Before leaving Washington, the lawmakers managed to pass a $1.3 trillion omnibus spending package to fund the government through the September, the end of the 2017-2018 fiscal year.  The bill was loaded with extraneous non-appropriations provisions as it became possibly the last legislative train to leave the station before midterm elections.  Many of these add-on provisions were considered must-pass legislation by congressional leaders that would have a tough time making it through both houses the remainder of this year in the growing contentious political climate in Washington. 

For the past several months, the agriculture community was guardedly optimistic that action on the new farm bill would begin by April in the House followed soon thereafter in the Senate.   Agriculture committee leaders and committee staffs in both the House and Senate had been negotiating legislative details and writing a draft bill title-by title and section-by-section for months.  Just days before the recess, rumors leaked out that the food assistance title of the House draft contained work requirements for able-bodied men to be eligible for the Supplemental Nutrition Assistance Program (SNAP).  Rank and file Democrats on the House committee, feeling they should have been involved earlier in SNAP discussions, announced they would not vote for the farm bill in its present form.  This action brings farm bill progress to a halt for the foreseeable future.

Prospects for Hill action on other priority legislative initiatives such as immigration, agriculture labor workforce, infrastructure, healthcare and telecommunications are diming and could get pushed into 2019.

Trade continues to be a contentious economic, political and diplomatic issue in Washington, around the country and among our international trading partners.  As the Administration threatens to place tariffs on imports from certain countries, those countries quickly prepare restrictive retaliatory tariffs against American exports.  U.S. food and agriculture exports are expected to suffer the most from a trade war.

In addition to appropriating funds to run the federal government through September 30, the omnibus provided a legislative vehicle to pass a plethora of unrelated items deemed must-pass by congressional leadership and by the constituency of those pieces of legislation.  Here is a summary of several items that interest Grangers:

Healthcare

• $1 billion in new funding for grants to states and Indian tribes to address the opioid epidemic including rural communities
• Increased funds for special education
• Increased funds for charter schools
• New funds for rural health care
• Restoration of funds for adoption and guardianship initiatives
• $32 million for telemedicine and distance learning grants in rural areas

Broadband

• $600 million for the Secretary of Agriculture to conduct a new rural broadband loan and grant pilot program
• $30 million for a grant program to finance rural broadband transmission in eligible areas

Co-Op Tax Fix

The recent tax bill contained an unintended consequence known as Section 199A.  This deduction was designed to give pass-through entities (the way many farms are structured)  benefits similar to corporations whose tax rate was slashed to 21 percent.  Farmers who sell to co-ops could deduct 20 percent of their gross sales while farmers who sell to other companies can only deduct 20 percent of their net business income.  The 199A “fix” states farmers can now deduct 20 percent of net farm income regardless of the entity they sell to.

Manure Reporting Exemption

In April 2017, the D.C. Circuit Court of Appeals ruled that the EPA’s 2008 exemption for animal operations from reporting emissions under Superfund and other laws were illegal and  animal operations should be regulated like toxic Superfund sites.  Animal agriculture estimated that up to 200,000 farms and ranches would be required to report ammonia and hydrogen sulfide emissions from manure.  This legislation exempts farms and ranches from those reporting requirements.

Relief for Truckers

A 2012 law required the Department of Transportation to create and enforce an electronic logging device rule for truckers.   The rule became effective in February 2016 and required all truckers who were currently required to keep records to install and use an electronic logging device.  Federal law limits maximum drive time to 11 consecutive hours followed by 10 consecutive hours of rest.  For a great many livestock haulers, this is not enough drive time to move live animals safely to today’s markets.  This legislation delays the rule one year to allow for animal haulers, animal agriculture and the DOT to attempt a compromise.

Fire Funding Finally

For decades, our 154 national forests have needed attention, repair and funding for fire suppression.  This legislation contains $2.25 billion of new budget authority available to the Departments of Agriculture and Interior for fire suppression, forest management and mitigation of the frequency of wildfires.  National forests were originally envisioned as working forests with multiple objectives: to improve and protect the forests, to secure favorable watershed conditions, and to furnish a continuous supply of timber.  Only 10 percent of the annual growth on national forests is currently being harvested leaving the other 90 percent to accumulate as fuel for forest fires and bug infestation.  The legislation is intended to fix these problems. 

The omnibus also includes a two year extension of the Secure Rural Schools program to support schools in counties with large areas of federal lands and a low real estate tax base.