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Cooperative Sales Could Reap Tax Breaks, or Not, While C-Corps Lose Some Attraction

DTN | Posted on January 25, 2018

While members of Congress try to deconstruct a tax-law change that drives farm sales to cooperatives over private companies, farmers are taking advantage of the law change and wondering whether they will get to continue reaping the rewards. Then there are the farmers who would like to take advantage of some of the new 20% tax breaks for pass-through income, but they sell their commodities through C corporations. Instead of a tax deduction, they could face higher tax rates if they do not restructure those corporations. In the run-up to completing the new tax law, some in Congress worked to offer a counter tax deduction for grain cooperatives. The new provision on "qualified cooperative dividends" from cooperatives was written to benefit not just any patronage dividend, but also any "per unit retain allocation." That translated into any amount paid to patrons for products sold for them. The language also broadens out further into any revenue from a farmer cooperative "that is includible in gross income." The tax break amounts to 20% of all income that comes from those dividends or sales from a farmer cooperative. "That's the problem is it's extremely broad," said Paul Neiffer, an accountant and principal with CliftonLarsonAllen. "It's essentially any payment a cooperative gives to a farmer, including purchasing their crop."If Congress had limited the provision strictly to patronage dividends, then it would be a much smaller issue. And after the implications were flushed out a little bit earlier this month, Sens. John Hoeven, R-N.D., and John Thune, R-S.D., began working with groups representing farmer cooperatives and grain companies to correct the language in the new law.


America must get out of the woods on medical research funding

The Hill | Posted on January 23, 2018

Bipartisan voices have recognized the importance of adequately funding the National Institutes of Health (NIH), with the House and Senate proposing $1-2 billion in increased funding. We may be tempted to breathe a sigh of relief that greater support from the federal government is forthcoming.  But we shouldn’t.  Current proposals, while increases, fail to bring the NIH up to historical funding levels after correction for inflation. And equally importantly, they don’t adequately address support for the myriad other federal agencies which play key roles in supporting medical research. According to ACT for NIH, while any funding increase is positive, it would take $2.6B a year for the next 5 years to get us back to the purchasing power in 2003 – and given the promise of imminent breakthroughs, we should be investing more.


Court due to enforce manure reporting rule Jan. 22

Capital Press | Posted on January 23, 2018

A federal court is expected to finalize an order Monday that will require untold thousands of farms to report that their animals are continuously releasing at least 100 pounds of ammonia or hydrogen sulfide per day, even though there is no generally accepted way to calculate emissions from decaying manure. The Environmental Protection Agency, which argued against the mandate, has instructed producers to email the National Response Center, rather than deluge the Coast Guard-staffed center with phone calls. Within a month, producers will have to follow up and file a form with EPA regional offices.“It’s not going to be fun for producers. It’s not complicated, but it’s different,” Washington State Dairy Federation policy director Jay Gordon said. “You check the box and then do something more productive.”The mandate stems from a lawsuit filed by environmental groups against the EPA. The groups objected that the EPA exempted agriculture from the Superfund law, which requires factories and vessels to report chemical leaks and spills.


Grain elevators desperate for tax bill fix

Agri-Pulse | Posted on January 20, 2018

Key senators are scrambling to rework a benefit for farmer cooperatives that was created by the new tax law, and the fix couldn’t come soon enough for owners of private elevators like Doug Bell.  The co-op provision was meant to replace the cooperatives’ Section 199 deduction that the law repealed, but tax experts say that the new deduction is so lucrative that farmers will have a strong incentive to sell to a co-op rather than a privately owned or publicly held grain buyer. In fact, so lucrative is the co-op benefit that some private grain buyers are said to be looking at forming co-ops to take advantage of the new provision. 


New England congressional delegations submit bill to ban offshore drilling

Maine Press Herald | Posted on January 17, 2018

A bipartisan group of U.S. senators and representatives from New England has introduced a bill to prohibit oil and gas drilling off the New England coast. The New England Coastline Protection Act would prohibit oil and gas extraction activities off New Hampshire, Connecticut, Maine, Massachusetts and Rhode Island.It’s a response to the Trump administration’s planto open nearly all U.S. coastlines to offshore oil and gas drilling.


Prairie dog endangered-species plan eases rules under Trump

The Salt Lake Tribune | Posted on January 17, 2018

Wildlife managers under the Trump administration are moving to loosen endangered-species protections for Utah prairie dogs, flipping the script in a long-running conflict over federal policies in a town where residents say they’re overrun by the creatures.The U.S. Fish and Wildlife Service plan would allow prairie dogs to be killed or removed from private property more often, relaxing regulations designed to protect the species.


US Supreme Court Won't Hear Prairie Dog Protections Lawsuit

US News and World Report | Posted on January 17, 2018

The U.S. Supreme Court won't hear an appeal from Utah property owners challenging endangered-species protections for prairie dogs, but the plaintiffs say the case has nevertheless made a mark as the Trump administration moves to loosen the rules.The lawsuit was a key driver of the new federal plan that would make it easier to remove or kill prairie dogs when they interfere with development of homes and business, lawyers for the residents of the southwestern city of Cedar City said Monday.


Nearly all members of National Park Service advisory panel resign in frustration

The Washington Post | Posted on January 17, 2018

More than three-quarters of the members of a federally chartered board advising the National Park Service have quit out of frustration that Interior Secretary Ryan Zinke had refused to meet with them or convene a single meeting last year. The resignation of 10 out of 12 National Park System Advisory Board members leaves the federal government without a functioning body to designate national historic or natural landmarks. It also underscores the extent to which federal advisory bodies have become marginalized under the Trump administration. In May 2017, Zinke suspended all outside committees while his staff reviewed their composition and work. In a letter to the secretary on Monday, departing board chairman Tony Knowles, a former Alaska governor, wrote that he and eight other members “have stood by waiting for the chance to meet and continue the partnership . . . as prescribed by law.” All of the signatories, who serve as unpaid volunteers, had terms set to expire in May.,


Interior plans to move thousands of workers in the biggest reorganization in its history

The Washington Post | Posted on January 16, 2018

Interior Secretary Ryan Zinke launched an unprecedented effort Wednesday to undertake the largest reorganization in the department’s 168-year history, moving to shift tens of thousands of workers to new locations and change the way the federal government manages more than 500 million acres of land and water across the country. The proposal would divide the United States into 13 regions and centralize authority for different parts of Interior within those boundaries. The regions would be defined by watersheds and geographic basins, rather than individual states and the current boundaries that now guide Interior’s operations. This new structure would be accompanied by a dramatic shift in location of the headquarters of major bureaus within Interior, such as the Bureau of Land Management and the Bureau of Reclamation. Moving thousands of employees around the country would require congressional authorization. Zinke said the Trump administration plans to negotiate the reorganization in the upcoming budget approval process. “This proposal is concerning because it appears to eliminate the Navajo Regional Office of the Bureau of Indian Affairs,” said  Sen. Martin Heinrich (D-N.M.). “A change of this magnitude should only come after extensive, meaningful government-to-government consultation with the affected tribes.  On its face, this looks more like a dismantling than a reorganization.” The politics of moving employees is often difficult, Jewell said. Interior sought to consolidate the BLM offices for New Mexico and Arizona because the topography of the states is so similar. “Congress came after us. You would’ve thought we were ending the world as we knew it. Politicians came out of the woodwork,” Jewell said. “You throw up your hands and say it’s not worth it. If you’re a politician it looks like your district lost and another district won.”At a budget hearing in June, Zinke defended a $1.6 billion proposed budget cut at Interior, saying he planned to shave 4,000 positions from the workforce. In September, he said a third of Interior’s staff was “not loyal to the flag,” meaning the Trump administration.


FCC uses bogus data to show big increases in broadband access

Daily Yonder | Posted on January 11, 2018

Across the country, the Federal Communications Commission wants millions of rural Americans to think they have broadband at home and the workplace – when they don’t. The self-reported claims of service are very convenient for large telecommunications companies, which might face more competition otherwise. At the end of the year, the Federal Communications Commission released data that it knows to be inaccurate, which will damage the lives and livelihoods of millions of our fellow citizens who live and work in rural America. In its publication of eligible census blocks for the Connect America Fund (CAF) auction, the FCC excluded 432,302 rural homes and businesses in areas that previously had been eligible to receive public support for broadband service.The vast majority of these areas had been determined by the FCC and the telephone industry to be too costly for the telephone companies to serve with broadband – even with subsidies – so the FCC initially decided to auction financial support for these remote areas. And yet, in the closing days of 2017, the FCC removed 30% of all the eligible rural locations from the CAF auction by applying newly released data regarding the availability of broadband service.


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