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April 26, 2013
Volume 13
Issue 21
Friday, April 26, is shaping up to be the final day of the 2013 legislative session. That being the case, the legislative team of Indiana Farm Bureau will be spending most of the day monitoring activities at the Statehouse, and this issue of the Dispatch will be shorter than usual. Look for a more complete report on legislative action during the final week of the session in next week’s edition of the Dispatch and in the May 20 issue of The Hoosier Farmer.
BUDGET DEAL REACHED The conference committee working to resolve the differences between the House and Senate versions of the biennial budget reached an agreement and released its report on Thursday. Legislative leaders and Gov. Mike Pence resolved their disagreement over the governor’s proposed 10 percent income tax by including a 5 percent cut to be phased in through 2017. According to media reports, the budget will also rescind entirely the inheritance tax retroactive to Jan. 1 of this year. Other features reportedly included in the $30 billion budget are:
- $215 million per year increase for roadwork, plus $200 million per year for a reserve fund for future work.
- A 2 percent increase for K-12 education funding in 2014 and 1 percent in 2015. In addition, $30 million in additional money will be provided for high-performing schools and $300 million to a tuition reserve fund.
- $206 million for new university projects and $66 million per year for university performance funding.
- $250 million to a reserve Medicaid contingency fund that authorizes the governor to negotiate an expansion of Medicaid through the Healthy Indiana Plan.
- A $120 million annual surplus and a $2 billion reserve.
VIDEOTAPE/TRESPASS BILL STILL ALIVE The controversial bill dealing with videotaping activities at an agricultural or industrial location was still alive as of late Thursday. The bill, SB 373 (Sen. Travis Holdman, R-Markle, and Rep. Bill Friend, R-Macy), was assigned to a conference committee chaired by Holdman. Throughout the week, a number of draft conference committee reports were circulated among the conferees, but the two Democrats – Sen. Karen Tallian of Portage and Rep. Pat Bauer of South Bend – refused to sign any of them. On Thursday, the reluctant Democrat in each house was replaced by a Republican. Senate President pro tem David Long (R-Fort Wayne) named Sen. Brent Steele (R-Bedford) to replace Tallian and House Speaker Brian Bosma (R-Indianapolis) replaced Bauer with Rep. Greg Steuerwald (R-Danville).
SYNGAS CONTRACT REVIEW STILL ALIVE The legislative effort to direct the Indiana Utility Regulatory Commission to take a second look at the impact that the state’s support of the proposed synthetic natural gas plant in Rockport was revived this week as SB 494 was stripped of its original language and new language was inserted in a conference committee. The end result of that exercise was that SB 494 became the legislative vehicle that will require the IURC to undertake such a re-examination. The original language of SB 494, which dealt with a number of state and local taxation issues, was incorporated into another bill during the conference committee process, so it became an available vehicle for the synthetic gas issue.
MARKETPLACE FAIRNESS ACT The U.S. Senate and House are scheduled for a district work period the week of April 29 - May 3. Congress will be back in session the week of May 6.
The Marketplace Fairness Act, S. 743 (formerly S. 336), passed a final cloture vote on Thursday. A vote on passage of the actual bill is expected upon Congress’ return. The Marketplace Fairness Act would allow states to enforce their existing sales tax laws on remote sellers. It does not create new taxes or increase existing sales taxes. These are taxes that consumers theoretically should have been voluntarily paying all along. In addition to placing local merchants at a disadvantage, the disparity deprives state and local governments of the tax revenue they need to provide essential services. Since local governments and schools rely heavily on property taxes for funding, when sales tax revenues decline they often turn to property taxes to make up the difference. For land based-businesses such as farming and ranching, this is particularly onerous.
States must adopt sales tax collection simplification requirements in order to be able to collect sales taxes on remote retailers. The bill provides a small seller exemption so that remote sellers with less than $1 million in annual sales do not have to collect sales taxes and says that businesses must be provided software for collecting the tax to ease the administrative burden.
FEDERAL TAX REFORM Discussion on Capitol Hill has turned to tax reform. Farm Bureau wants individual tax code reform to be simple, transparent, revenue-neutral and fair to farmers. Congressman Todd Young, who represents Indiana’s 9th Congressional District, sits on the House Ways & Means Committee, and farmers should take opportunities to talk about tax reform while on recess.
Farm Bureau is involved in the discussion and is watching critically the discussion around federal income tax and corporate tax reform as well as cash accounting, capital gains taxes, estate taxes and Sec. 179 small business expensing. While broadening the base and lowering rates is important to any tax reform effort, a lower income tax rate may not adequately compensate farmers if they lose too many tax deductions. Farm Bureau recommends that farmers and ranchers be allowed to apply the tax benefits of unclaimable deductions and credits to previous and/or future tax years.
FOOD SAFETY INSPECTION SERVICE USER FEES USDA’s FY14 budget contains several proposals for user fees, including $4 million in new user fees annually under the FSIS to cover the cost of certain meat, poultry and egg product inspection services. Farm Bureau and a coalition of livestock groups sent Congress a letter opposing these new user fees.
Congress ultimately determines the USDA budget. The proposed user fees will not be implemented unless they are included in the FY14 Agriculture Appropriations bill. Please contact Sen. Donnelly to encourage them to oppose new FSIS user fees.
TRANS-PACIFIC PARTNERSHIP The office of the U.S. Trade Representative has sent Congress a notification of its intent to include Japan in the Trans-Pacific Partnership agreement negotiations. This notification follows an announcement by the current TPP countries on April 21, 2013, that they agreed to include Japan in the TPP.
The notification to Congress triggers a 90-day consultation period on U.S. negotiating objectives with respect to Japan. With Japan’s entry the TPP countries amount to 40 percent of global GDP and one-third of all world trade. The TPP countries include: Australia, Brunei, Canada, Chile, Malaysia, Mexico, New Zealand, Peru, Singapore, United States and Vietnam.
Farm Bureau supports Japan’s addition to the TPP negotiations in order to increase trade opportunities by reducing their tariff and non-tariff barriers to U.S. agricultural products. The U.S. exported over $13.5 billion in agricultural goods to Japan in 2012, led by corn, pork, soybeans, wheat and beef.
RENEWABLE FUEL STANDARD Last week, the House Energy & Commerce Committee released its second white paper in a series on the RFS. Each paper will provide an overview of an issue and solicit input from interested stakeholders in the form of answers to questions posed. The current white paper addresses agricultural sector impacts.
The original RFS was created in the Energy Policy Act of 2005 and was greatly expanded (as RFS 2) under the Energy Independence and Security Act of 2007. The committee’s examination is just one of many discussions involving the RFS in this Congress as more and more biofuels are mandated to be blended into the U.S. transportation fuel supply.
AFBF policy supports the RFS 2 as adopted in the Energy Independence and Security Act of 2007. AFBF will be submitting comments and will share those comments with state Farm Bureaus when they are available.
FARM BILL The House Agriculture Committee is planning to markup the farm bill on May 15, according to Chairman Frank Lucas (R-Okla.), speaking to the Oklahoma Farm Report and Radio Oklahoma Network. An official markup notice has yet to be issued but Lucas and Rep. Collin Peterson (D-Minn.), ranking member of the committee, have publicly discussed that date for the markup and it “is a go” said Lucas.
EPA/CLEAN WATER ACT Judge John Bailey of the U.S. District Court for the Northern District of West Virginia denied EPA’s motion to dismiss the lawsuit filed by West Virginia poultry grower Lois Alt, which challenges an EPA order that she obtain a Clean Water Act permit for stormwater runoff from her farmyard. Alt’s case will now proceed to briefing on the merits.
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