The omnibus spending bill in Congress that faces a Friday deadline to avoid a government shutdown did not include a Section 199A fix as of Monday night, Sen. Charles Grassley, R-Iowa, said Tuesday during his weekly news conference with agriculture journalists.
"This absolutely has got to be fixed," he said. "This is very important that we don't put private elevator people in Iowa out of business."
The tax language would eliminate a 20% deduction on all gross sales to farmer cooperatives that was included in the Tax Cuts and Jobs Act. No sooner was the tax bill signed than the grain industry determined it was leading to "unintended consequences" in the sale of farmer commodities. Lawmakers said they did not intend to distort the commodity markets when they drafted the tax break.
A number of agribusinesses in recent weeks told leaders of the U.S. House of Representatives and the U.S. Senate that they support the language change in the tax code backed by farmer cooperatives and businesses that would provide farmers with a deduction similar to what they received under the old Section 199.
On the biofuels front, Grassley said expired tax credits likely will not be part of the omnibus spending bill. Instead, he said, some of them could see the light of day during the upcoming lame-duck session of Congress.
That includes the $1 biodiesel blenders tax credit that expired more than one year ago, as well as the production tax credit and the accelerated depreciation allowance for second-generation biomass plant property.
With the Trump administration reportedly considering tariffs and other measures aimed at China's alleged theft of intellectual property, Grassley said he has concerns about what it could mean for U.S. farmers.
Currently, the U.S. exports about $21 billion worth of soybeans to the Chinese. China's government has indicated it may consider some action on U.S. soybeans as a way to retaliate against the Trump administration.
"I think the U.S. for too long has been too tolerant of the Chinese stealing our intellectual property," Grassley said, but acknowledging a potential backlash on soybeans is "a big concern."
Grassley said any attempt by the House to pass a partisan farm bill to send to the Senate, likely wouldn't pass the Senate.
"There's no chance to get it through the Senate if it's not bipartisan," he said.
It is more likely the Senate will work on its own bill, Grassley said, and the process already is underway. Sen. Pat Roberts, R-Kan., chairman of the Senate Ag Committee, reportedly has met with 30 senators to talk about the farm bill.
"Roberts told me he hopes to start the process after Easter recess," Grassley said.
Todd Neeley can be reached at email@example.com
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