Omnibus spending bill includes tax extenders, new program funding

The omnibus spending bill repealed country-of-origin labeling requirements, which have been ruled to be in violation of World Trade Organization rules. A WTO panel had approved more than $1 billion in tariffs that could be put in place in Canada and Mexico if the requirements were not changed.

As the end of the year approaches, many companies begin offering special deals to clear the decks for next year’s models. That was also true of congressional leaders who rushed to complete work on a spending bill to keep the government operating and clear up some other old issues.

The House and Senate passed and President Obama signed a $1.1 trillion omnibus spending bill (H.R. 2029) that followed passage of a $622 billion tax bill that included a list of tax relief extensions and renewable energy credits for farmers and ag-related businesses.

While Tea Party members complained about the spending increases and special interest “handouts” in the bill, House Speaker Paul Ryan pulled together enough votes from the Republican side that – with the help of Democrats delivered by Minority Leader Nancy Pelosi – allowed him to win passage of the Omnibus spending bill by a 316-113 vote.

The House vote early on the morning of Dec. 18 was followed later that same day by a 65-33 vote in favor in the Senate. President Obama signed the measure that afternoon as House and Senate members began a mass exodus from Washington.

The vote was seen as a major win for Speaker Ryan, who reluctantly agreed to accept the post after former Speaker John Boehner of Ohio resigned under pressure from House Freedom Caucus members.

Compromise produces benefits

The latter along with some presidential candidates were demanding Congress cut off funding for Planned Parenthood in exchange for their votes for a spending bill. In the end, Ryan fashioned a compromise that kept the government operating and produced a number of benefits for farmers and agri-businesses.

Among those was legislative language that requires USDA to allow producers to use commodity marketing certificates for marketing loan redemptions beginning with the 2015 crop marketing year (Aug. 1 for cotton).

The National Cotton Council sought the provision to address the fact that cotton is the only crop where Commodity Credit Corp. loan gains are counted toward the new $125,000 payment limit in the 2014 farm bill. Those certificates have been used in the past when low cotton prices pushed direct payments and marketing loan gains above the payment limit.

Perhaps the biggest disappointments surrounding the spending bill was Congress’ failure to include language pre-empting state GMO labeling laws and to stop EPA from implementing its controversial Waters of the U.S. rule.

The bill did repeal country-of-origin labeling requirements, which have been ruled to be in violation of World Trade Organization rules. A WTO panel had approved more than $1 billion in tariffs that could be put in place in Canada and Mexico if the requirements were not changed.

It also provided some tax relief “extenders” that could benefit farmers now but more so in the future as they try to battle their way out of the low-price morass many find themselves in.

Section 179 permanent

The bill includes a provision that makes the Section 179 equipment expensing deduction permanent. In the past, growers could write off a significant portion of the cost of new equipment in the first year, a rule that helped them and the farm equipment industry.

The Section 179 write-off expired in 2014. It was extended at the end of 2014, but many growers could not take advantage of it because they had to take possession of the equipment before the end of the year.

The omnibus spending and tax bill makes the provision retroactive throughout 2015 and permanent. It also raises the previous deduction limit of $25,000 to $500,000 to accommodate the much larger equipment producers operate these days.

Many row crop producers won’t be able to use the provision for 2015 because of the lack of income due to low commodity prices and weather-related yield reductions, but the rule could come back into play when prices begin to rise.

The bill also includes a five-year extension of bonus depreciation for property acquired and put in service during 2015 through 2019, with an added year of certain property with a longer production period. The bonus is 50 percent for property put in service in 2015, 2016 and 2017. It slides to 40 percent in 2018 and 30 percent in 2019.

Other ag provisions of the omnibus bill include:

-$450 million annually for reauthorization of the Land and Water Conservation Fund.

-$2.94 billion for USDA-ARS agricultural research programs.

-$1.51 billion for USDA’s Farm Service Agency.

-$898 million for Animal and Plant Health Inspection Service (APHIS).

-$864 million for USDA’s Natural Resources Conservation Services.

-$130 million for disaster aid for flooding and other natural disasters.

-Full funding for the Market Access Program and Foreign Market Development Program.

To learn more about H.R. 2029, visit

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