Chairman Frank Lucas today released the following statement on Scott O'Malia's last day as Commissioner of the Commodity Futures Trading Commission (CFTC). Last month, O’Malia announced he would resign to pursue other opportunities.
House Passes Farm Disaster Relief
WASHINGTON, D.C. — After months of uncertain fate in America's farm states, the House passed the omnibus appropriations act by a vote of 333-95 which contains almost $6 billion in farm disaster and market loss assistance and important tax relief to help alleviate the burden facing U.S. farmers and ranchers.
"Many farmers and ranchers struggle each year to keep their heads above water and they are particularly hard hit by taxes which take away any profits they do make," Smith said. "This disaster and tax relief package will help protect the future of our agricultural producers."
"American farmers and ranchers are facing the hardest times they have in years and the President has shown a complete lack of leadership in helping them," Smith said. "While it does not solve all the problems facing rural America, this legislation will help those farmers and ranchers who have lost crops due to adverse weather and those who have lost their markets abroad."
This package includes $2.575 billion in total funding to address crop disaster losses, divided into three parts and granting the Secretary of Agriculture broad authority to create and implement a disaster program.
Single Year Disaster -- $1.5 billion will be available to assist producers suffering crop losses in 1998.
Multi-Year Disaster -- A further $875 million will be available to provide assistance to those producers who have suffered a multiple-year crop loss, especially those farmers in the Upper Midwest battling wheat scab disease and multiyear flooding.
Livestock Feed Assistance -- A $200 million program of livestock feed assistance will provide cost share assistance to livestock producers who lost their 1998 supplies of feed to disaster.
Payments shall be available to all producers of all crops who have had crop losses and are allowed for quantity, quality (including, but not limited to alfatoxin) and severe economic losses due to damaging weather or related condition. The Secretary is given authority to determine eligible crop losses, loss thresholds, eligible persons, payment limitations and payment rates. In addition, the Secretary is authorized to provide incentives to those who purchased crop insurance in 1998. Recipients of 1998 disaster assistance, who did not purchase crop insurance, are required to purchase crop insurance for next two years.
The bill also provides over $3 billion in payments to producers eligible for Freedom to Farm contracts to partially compensate producers for lost markets in 1998 due to circumstances beyond their control. These problems include economic dislocation, unilateral trade sanctions, and a failure of the Administration to pursue trade opportunities aggressively. This assistance will come in the form of one-time payments representing approximately 50% of the Agricultural Marketing Transition (AMTA) payment received by the producer in fiscal year 1998. From the amount allocated for market loss assistance, dairy producers will receive payments totaling $200 million through a method to be determined by the Secretary.
Various tax provisions helping to ensure a safety net for farmers and ranchers are also included in the spending bill, including:
Health Insurance Deductibility — Expands deduction of health care insurance premiums for self-employed individuals, increasing the deduction by one-third immediately. Currently, these individuals may deduct 45% of health insurance premiums, this would move to 60% in 1999, 70% in 2002 and 100% in 2003.
Income Averaging -- Makes income averaging a permanent part of the tax code gives farmers and ranchers another tool to smooth out income fluctuations that are a part of every farm family's lives.
Five-year net operating loss carryback -- Farm operators may carryback a net loss in its operations to prior years, up to five years back, when the operation paid federal income taxes. Taxpayers may receive a tax refund using the net operating loss carryback.
Smith represents Oregon's Second Congressional District — which includes most of eastern, southern and central Oregon — in the U.S. House of Representatives.