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U.S.
Senator Ken Salazar
Member of the Agriculture, Energy and Veterans Affairs
Committees
2300 15th
Street, Suite 450 Denver, CO
80202 | 702 Hart Senate Building, Washington, D.C.
20510
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Salazar
Lauds Passage of Finance Comm. Ag Tax Package/ Includes Ag Disaster
Fund & Essential Ag & Energy Incentives
WASHINGTON
– United States Senator Ken Salazar helped pass the Heartland,
Habitat, Harvest, and Horticulture Act of 2007 out of the Senate
Finance Committee today. The bill is a package of agriculture-related
tax provisions that will complement the upcoming Farm Bill and includes
an Ag Disaster Trust Fund along with several conservation,
energy and agriculture provisions.
Specifically regarding the
disaster fund Senator Salazar said, “Many farmers and ranchers
across the Nation and in Colorado walk a tightrope between profits and
losses. Unfortunately, we have seen a rising number of weather-related
disasters, including prolonged droughts, blizzards or wildfires, decimate
the livelihoods of our family farmers and ranchers. The agriculture
disaster trust fund would aid these producers during these times and
streamline the process so that aid could be provided in a timely manner
to help prevent bankruptcies and foreclosures.”
Regarding the entire Heartland,
Habitat, Harvest, and Horticulture Act of 2007, Senator Salazar
said, “I have great interest in the Heartland, Habitat, Harvest
and Horticulture Act. It will provide critical assistance to farmers
and ranchers in Colorado and across the country, promote the production
of alternative and renewable fuel sources throughout rural America,
and help the Agriculture Committee craft a more focused and effective
Farm Bill.”
Several of Senator Salazar’s
provisions are contained in the package.
- The Agricultural
Disaster Trust Fund -- Currently, farmers and ranchers may
have to wait years to receive assistance from Congress for agricultural
disasters. Farmers and ranchers need a dependable safety net when
weather-related disasters strike. The proposal creates a trust fund
for agriculture disaster relief that would cover the “shallow losses”
not covered by crop insurance. “Shallow losses” are crop losses below
normal yield, but not large enough for crop insurance to provide assistance.
The trust fund will also provide funds for pest detection and disease
prevention for specialty crops and assistance to specialty crop producers
who lose vines and trees to natural disasters. The proposal requires
farmers and ranchers to purchase crop insurance in order to be eligible
for disaster assistance, and will be funded through allocation of
tariffs. The transfer of funds to the trust fund will sunset December
31, 2012. Payments could be made for crop years after 2007. Senator
Salazar was one of several members who fought for and supported this
provision.
- The Small Wind
Tax Credit creates a new 30% investment tax credit for qualified
small wind energy property expenses made by the taxpayer for the taxpayer’s
home, farm, ranch or small business. The credit is limited to $4,000
per taxable year. The credit is allowed for expenditures after December
31, 2007 for property placed in service prior to January 1, 2009.
- The Cellulosic
Biofuels Tax Credit
is a first-of-its-kind tax credit for the production of cellulosic
biofuels. The proposal creates a new production tax credit of 67¢
per gallon (in addition to the current 51¢/gallon ethanol credit
and the 10¢/gallon credit for small producers) for a total credit
of $1.28 per gallon for cellulosic fuel production. The credit terminates
the latter of December 31, 2012 or the end of the calendar year when
one billion gallons of cellulosic alcohol have been produced. The
proposal is effective for alcohol produced after December 31, 2007.
Senator Salazar believes that cellulosic biofuels are the first renewable
fuels source that have a real chance to displace significant amounts
of foreign oil, and that we should do everything we can to encourage
their production.
NOTE: The US Department of Energy estimates
that the cost difference between traditional starch ethanol production
and pioneer cellulosic ethanol production is approximately $1.28 per
gallon for initial volumes until the new technologies and manufacturing
processes mature. The existing VEETC ethanol credit and the 10-cent
small-producer ethanol credit by themselves fall short. By increasing
the incentive for cellulosic alcohol production from 50 cents to 67
cents and increasing the limit for the small producer credit from
15 million gallons per year to 60 million gallons per year, the Salazar
amendment will allow cellulosic ethanol to compete with existing starch
ethanol on a per gallon cost basis, thereby attracting strong investment
in new cellulosic alcohol production.
- The Mutual Ditch
Tax Fix will clarify that exchanges involving shares of stock
in mutual ditch companies should be tax-free. Mutual ditch companies
are unique corporations, organized as non-profit organizations solely
for the convenience of their members in managing a joint water distribution
system. The shareholders are often farmers and ranchers who have an
exclusive right to use the ditch company’s water in direct proportion
to the number of shares they own.
The Heartland, Habitat,
Harvest, and Horticulture Act of 2007 also includes a set of
provisions that will completely offset the costs of the bill. Now that
the bill has passed out of the Senate Finance Committee today it will
go to the Senate floor to be considered.
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