Lugar, Others, Introduce Farmer Relief Bill

July 20, 2000

Sen. Richard Lugar (R-IN), chairman of the Senate Agriculture, Nutrition and Forestry Committee, and Rep. John Boehner (R-OH) Wednesday introduced legislation to increase farmers' competitiveness by opening foreign markets, providing tax and regulatory relief, and expanding risk management options for farmers. Sens. Pat Roberts (R-KS) and Rick Santorum (R-PA) cosponsored the bill.

"This bill is about improving net farm income. It will provide farmers the tools to increase income and build on the existing farm safety net. Farmers will get tax relief from deductibility for health insurance -- so they the same benefit as other workers-- capital gains and estate tax relief and the ability to average out income in high and low years," Lugar said. The bill also would open foreign markets and reduce regulatory burdens on farmers, he added.

Many of the provisions were included in the tax bill that passed Congress – but was vetoed by the President – last year. "In fact, many of them were voted on in the last week as part of the estate tax and marriage penalty tax bills," Lugar said. "These taxes cut into a farmer's bottom-line. Lower taxes and increased trade are essential to increasing farmers' net income."

The legislation allows for the immediate full deduction of health care insurance premiums for farmers and the self-insured; provides a $500,000 exclusion ($250,000 for a married couple filing separately) from capital gains taxes on the sale of a farm; ensures that farmers are not disqualified from using income averaging due to the alternative minimum tax (AMT) calculation; allows farmers to deduct up to 20% of their taxable net farm income and put it aside in a tax free account for up to five years, allowing farmers to smooth out volatile income streams and minimize risks; and phases out the estate and gift tax over a 10-year period.

It also would grant fast track trade authority to the President and establish parameters for the reduction of subsidies and tariffs and exempt agriculture commodities, livestock and value-added products from current and future unilateral agricultural sanctions imposed by the United States.

Roberts said major crop insurance reform, several tax reform measures and regulatory reform all have been subject to congressional review or approval. Now "this (bill) is the rest of the ledger." Implementing the bill’s provisions would help farmers "over very difficult times because of the high risk nature of agriculture." The measure represents "the rest of what we promised in 1996 (when the farm law was enacted); it’s an ongoing effort, it will be bipartisan and regardless of what we have in the next farm bill, it will be a viable component part."