September 13, 2022
In this issue:
- Co-op Conference 2022
- Co-op H.R. Committee
- NCFC Update
- SDAC Participates in Event to Push for Ag Labor Reform
- November Ballot Measures
- Extension of COVID Emergency Declaration for Commercial Drivers
- Tax Court Ruling Suggests Another Look at Research Credits
- Biofuels Grants
Co-op Conference 2022
Thanks to everyone who attended Co-op Conference 2022 at the end of August in Oacoma. Highlights of the business meeting:
- Unanimous approval of the merger between SDAC and the Co-op Managers Association
- Re-electing Ken Snyder, Miles Mendel, Troy Grensberg, and Jason Stark to the SDAC Board of Directors
- Continuing the officer slate of Mike Traxinger, President; Jason Stark, Vice-President; Miles Mendel, Secretary; and Preston Kranz, Treasurer
We received many positive comments about this year’s program and are already starting to plan for next year’s conference.
Co-op H.R. Committee
During the Co-op Conference, the newly-established Human Resources committee had a chance to participate in a breakout session where the key topics were recruiting, retention, and resources. The group had a chance to ask questions, exchange tips and ideas, and discuss various payroll management options.
The committee is planning a virtual “meeting” in a couple of months. If your Human Resources staff person is interested in this opportunity, please contact firstname.lastname@example.org.
• Congress Returns from August Recess: The Senate returned to the nation’s capital last week and the House of Representatives returned this week for a compressed work period before members leave town to campaign ahead of November’s midterm elections. The top order of business—ensuring that federal government operations are funded past the end of the current fiscal year on September 30. It appears near certain that Congress will punt the issue until after the election by passing a short-term continuing resolution (CR). Beyond the CR, no major legislation is expected to be taken up in September or early October. One interesting fact on appropriations, in the modern budget and appropriations era (since 1977), annual appropriations have only been passed under “regular order” four times—1977, 1989, 1995 and 1997.
• Senate Committee Advances Ag Ambassador Nom: The Senate Finance Committee has unanimously voted to move forward the nomination of Doug McKalip to be the chief agricultural trade negotiator at the Office of the U.S. Trade Representative (USTR). In announcing the vote, Finance Committee Chair Ron Wyden (D-Ore.) said, “there’s no doubt that he’ll be ready to step in and succeed as Chief Ag Negotiator on day one, and he’s sure to be busy.” While there is no floor vote yet scheduled for the nomination, Senate leadership has indicated that they hope to bring McKalip up for a vote before the chamber recesses ahead of the election.
• USDA Climate-Smart Announcement Expected Next Week: The U.S. Department of Agriculture (USDA) is expected to announce further details about the pilot projects receiving funding under the Partnership for Climate-Smart Commodities. Among the projects to receive funding is SDSU’s Cottonwood Field Station, which is working on market opportunities for live beef and bison commodities that will use climate-smart grazing and land practices. “Their plan is to quantify, monitor and verify carbon and GHG benefits associated with climate-smart agricultural production in relation to practices on beef and bison," said Ag Secretary Vilsack.
SDAC Participates in Event to Push for Ag Labor Reform
Several NCFC members and other ag groups participated in events over the past week organized by the American Business Immigration Coalition (ABIC) to push for Senate action on ag labor reform. The two events—one last Friday at the South Dakota State Fair in Huron, S.D., and another at the American Royal in Kansas City, Mo.—were titled “Lower Food Prices, Keep Shelves Stocked: Common Sense Solutions to the Farm Labor Shortage.” Participating in the South Dakota event was the South Dakota Association of Cooperatives and a farmer member of Edge Dairy Cooperative; in Kansas City, a member of Dairy Farmers of America made the case for immigration reform for agriculture.
In addition to providing firsthand testimonies on the labor crisis facing agriculture, the events highlighted data from a recent Texas A&M International University study, which linked stabilizing the agricultural workforce and decreasing inflation and consumer prices, showing that ensuring farmers have a stable, secure, reliable, and legal workforce is crucial to keeping America’s grocery shelves stocked, combating inflation, and lowering food prices (including milk, eggs, meat, and produce) for all domestic consumers.
November Ballot Measures
South Dakota’s General Election in November will include two initiated measures.
Constitutional Amendment D would require the State to provide Medicaid benefits to any person over eighteen and under sixty-five whose income is at or below 133% of the federal poverty level, plus 5% of the federal poverty level for the applicable family size, as provided in federal law.
For people who qualify under this amendment, the State may not impose burdens or restrictions that are greater than those imposed on any other person eligible for Medicaid benefits under South Dakota law.
South Dakota is one of 12 states that has not expanded Medicaid coverage. Currently, Medicaid coverage is only available in South Dakota for those with low income who are either children, elderly, pregnant, disabled, or very low-income parents/caretakers of minor children. Children comprise more than two-thirds of the state’s Medicaid population.
According to proponents, Amendment D would strengthen health care in South Dakota, which would generate an estimated $3.5 billion in new economic output in the state by 2025. It would strengthen rural hospitals and clinics, and make it easier for people in rural South Dakota to get health care.
According to opponents, Medicaid expansion will lead either to higher taxes or reduced spending on education. It would also cause the truly needy kids, seniors, and disabled persons to compete with able-bodied working-age adults for the pool of money available to Medicaid. Opponents also point out that this does not belong in the Constitution.
According to the Fiscal Note attached to the amendment, the proposed expansion of Medicaid could cover an additional 42,500 eligible individuals, with a total estimated cost over the first five years of $1,515,214,000. For the first five years under current federal law, the state’s share of expenses could be $166,244,000 with the state recognizing additional general fund savings of $162,473,000.
Initiated Measure 27 would legalize the possession, use, and distribution of marijuana by anyone age 21 and older. If passed, IM27 would allow possession of up to one ounce of marijuana, and distribution of up to one ounce without payment or other consideration. Marijuana remains illegal under Federal Law.
According to the proponents, criminalizing cannabis is a “waste of time and resources for law enforcement.” Legalization policies in other states have created over 400,000 new jobs and generated over $10 billion in tax revenue. They also believe that IM27 will guarantee that all medical cannabis patients are free from arrest, because many patients cannot easily find a doctor who will issue a medical cannabis recommendation.
According to opponents, IM27 would lead to higher crime rates, increased suicide rates, traffic fatalities, workplace injuries, and mental health problems. It would also fuel the “black market” and would not generate the anticipated tax revenue.
Absentee voting begins September 23.
Extension of COVID Emergency Declaration for Commercial Drivers
The Federal Motor Carrier Safety Administration (FMCSA) has declared that the continuing national emergency warrants extension of the modified Emergency Declaration No. 2020-002, which provides exemptions for certain requirements in 49 CFR Part 395 of the Federal Motor Carrier Safety Regulations (FMCSRs) for the fifty States and the District of Columbia.
This extension gives emergency relief from maximum driving time for those motor carriers and drivers providing direct assistance in support of relief efforts related to the COVID-19 public health emergency. Direct assistance means transportation and other relief services provided by a motor carrier or its driver(s) incident to the immediate restoration of essential services (such as medical care) or essential supplies related to COVID-19 during the emergency.
The extension is limited to transportation of (1) livestock and livestock feed; (2) medical supplies and equipment related to the testing, diagnosis, and treatment of COVID-19; (3) vaccines, constituent products, and medical supplies and equipment including ancillary supplies/kits for the administration of vaccines, related to the prevention of COVID-19; (4) supplies and equipment necessary for community safety, sanitation, and prevention of community transmission of COVID-19 such as masks, gloves, hand sanitizer, soap, and disinfectants; (5) food, paper products, and other groceries for emergency restocking of distribution centers or stores; and (6) gasoline, diesel, diesel exhaust fluid (DEF), jet fuel, ethyl alcohol, and heating fuel including propane, natural gas, and heating oil. Direct assistance does not include non-emergency transportation of qualifying commodities or routine commercial deliveries, including mixed loads with a nominal quantity of qualifying emergency relief added to obtain the benefits of this emergency declaration. To be eligible for the exemption, the transportation must be both (i) of qualifying commodities and (ii) incident to the immediate restoration of those essential supplies.
The extension remains in effect until 11:59 P.M. (ET), October 15, 2022, unless modified or terminated sooner by FMCSA.
Tax Court Ruling Suggests Another Look at Research Credits
A recent U.S. Tax Court ruling on motions for summary judgment indicates that costs associated with trial crops may qualify as Section 41(b) Qualified Research Expenses (QREs). The case is J.G. Boswell Co. v. Commissioner, (No. 2408-19). J.G. Boswell Co., a large private farming operation, grows cotton, tomatoes, alfalfa, and other crops, and conducts research on test plots to improve quality and yield. On its 2014 return, the taxpayer claimed $17 million of QREs (including all costs of cultivating and evaluating the research acre crops) and a corresponding Section 41(a) credit of $1.74 million. The IRS disallowed all but $117,722 of that amount, contending that is all the taxpayer can show it incurred beyond what it would have incurred to cultivate the same land as production acres. Tax Court Judge Travis Greaves denied motions for summary judgment by both the taxpayer and the government in this case. However, in his ruling Judge Greaves stated: “If petitioner demonstrates that its tests of the viability of improved crops are section 41(d) qualified research, therefore, the trial crops it produced were experimental models, and the associated costs are QREs to the extent permitted by section 41(b).”
USDA is now accepting applications for $100 million in grants to increase the sale and use of biofuels derived from U.S. agricultural products. The funding is available through the Higher Blends Infrastructure Incentive Program, which seeks to market higher blends of ethanol and biodiesel by sharing the costs to build and retrofit biofuel-related infrastructure. Additional information is available on Grants.gov or page 51641 of the Aug. 23, 2022, Federal Register.
Quote: “I don’t dislike him. I just don’t like him, which is quite different." ~ Lady Violet Crawley, Downton Abbey