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"ONAGAIN, OFF AGAIN"; SENATE FINANCE COMM.
TAKES FIRST STEPS IN FARM BILL PROCESS

Friday, October 5, 2007                             By Shawn Wade

      TheSenate Finance Committee completed markup of the Heartland, Habitat, Harvestand Horticulture Act of 2007 (4-H Act of 2007) this week and added severalcritical pieces to the 2007 Farm Bill puzzle at the same time.

      TheFinance Committee's mark-up session was almost stopped before it got starteddue to a last minute objection being raised by a single senator. Fortunately, thatsituation was quickly resolved and the Committee was able to complete its workthe evening of October 4.

      TheFinance Committee approved the nearly $16 billion 4-H Act of 2007 on a 17-4vote. The vote clears the way for Senate Agriculture Committee members to takeup their Farm Bill provisions on October 22.

      Accordingto those familiar with the Farm Bill situation, the Finance Committee's actionswere a necessary first step in moving the entire process forward. Earlier inthe week Senate Agriculture Committee Chairman Tom Harkin scrapped hisannounced plan to begin marking up the 2007 Farm Bill in order give the FinanceCommittee time to complete its' work.

      Ofprimary importance to the Senate Agriculture Committee was the FinanceCommittee's approval of spending offsets needed to complete mark-up of the 2007Farm Bill.

      Alsoincluded in the Finance Committee package were provisions establishing apermanent Agricultural Disaster Assistance Trust Fund and the shifting ofselected conservation program benefits from payments to tax credits.

      Withthe Finance Committee's work finished, the Agriculture Committee's markup isnow set for October 22. The Committee's revised timetable is necessary becauseSenate Agriculture Chairman Tom Harkin will be managing the Fiscal 2008 Labor,Health and Human Services, Education bill on the Senate floor the third week ofOctober.

     Foradditional details about this legislation go to http://finance.senate.gov/sitepages/legislation.htm and click on the 4-H Act of 2007. 

 

FSAANNOUNCES PROCEDURES FOR REPORTING
MARKET GAINS DERIVED FROM CCC LOANS

Friday, October 5, 2007                             By Shawn Wade

      TheUSDA Farm Service Agency has issued procedures for reporting market gainsderived through the Commodity Credit Corporation's nonrecourse loan program forloans redeemed after January 1, 2007. Beginning with the 2007 tax year, FSAwill begin reporting market gains on the Internal Revenue Service (IRS) Form1099-G, Certain Government Payments.

      AdditionallyFSA also announced that beginning with loans redeemed after January 1, 2008 FSAwould also report storage credit amounts, if any, on Form 1099-G as well.

      Thenew procedures, announced in FSA Notice-2074, were initiated by the Agencyfollowing publication of Internal Revenue Bulletin 2007-33, Notice 2007-63, "Repaymentof Commodity Credit Corporation Loans."

      TheInternal Revenue Service bulletin was published on August 13, 2007 to answer "frequentlyasked questions regarding the tax treatment of "market gain" associated withthe repayment of Commodity Credit Corporation (CCC) loans under the nonrecoursemarketing assistance loan program authorized under the Farm Security and RuralInvestment Act of 2002."

      Underthe 2002 Act nonrecourse marketing assistance loan program, CCC loans foreligible commodities are made at a specified rate per unit. Generally therepayment amount for a loan secured by the pledge of an eligible commodity isbased on the lower of the original loan rate or the alternative repayment rate,as determined by the CCC, for the commodity as of the date of repayment.

      Producerscan redeem commodities pledged as collateral and repay the CCC loan using cash,purchase CCC certificates for use in repayment of the loan, or deliver thepledged collateral as full payment for the loan at maturity. CCC certificatesare available for purchase by producers that have outstanding commodity loansfor which a crop is pledged as collateral.

      A marketgain is derived when a producer uses cash or CCC certificates to repay a loanwhen the alternative repayment rate is less than the original loan rate.

      Accordingto the IRS, regardless of whether a producer repays a CCC loan in cash or usesCCC certificates in repayment of the loan, the market gain is taken intoaccount either as income (if the taxpayer has not made an election under ¤ 77of the Internal Revenue Code) or as an adjustment to the basis of the commodity(if the taxpayer has made an election under ¤ 77).

      Whena producer elects under ¤ 77 to include the amount of CCC loans in gross incomethe market gain associated with repayment of a CCC loan is accounted for in theyear in which the CCC loan is repaid by making an adjustment to the basis ofthe commodity that secures the loan.

      Theproducer's basis in the commodity before repayment of the loan is equal to theamount of the original loan previously reported as income. This basis should bereduced by the amount of any market gain associated with the repayment of theloan.

      Accordingto the IRS an individual producer that has made a ¤ 77 election should reportthe market gain as an Agricultural Program Payment on line 6a of Schedule F,but not as a taxable amount on line 6b, for the year in which the loan isrepaid.

      Thereporting process is somewhat different for producer's that have not electedunder ¤ 77 to include the amount of CCC loans in gross income.

      Producer'sthat have not made an election under ¤ 77 are instructed to report market gainsas income for the year in which a CCC loan is repaid. An individual taxpayerthat has not made an election under ¤ 77 should report the market gain as anAgricultural Program Payment on line 6a and as a taxable amount on line 6b ofSchedule F for the year in which the loan is repaid.

      Forfurther information regarding Internal Revenue Bulletin 2007-33, Notice2007-63, contact Marnette M. Myers of the IRS's Office of Associate ChiefCounsel (Income Tax and Accounting) at (202) 662-4920 or Stephen J. Coleman ofthe Office of Associate Chief Counsel (Procedure and Administration) at (202)622-4910.

 

NRCS TOHOLD 2008 EQIP PDG/LWG MEETINGS

      TexasSoil and Water Conservation Districts invite the public, and any agencies withinterest, to participate in the agency's 2008 Program Development Group (PDG)meetings.

      Thepurpose of the PDG's is to provide members of the community a forum forsubmitting recommendations on local issues and county based funding that can beaddressed through the Environmental Quality Incentives Program (EQIP).

      LocalSoil and Water Conservation Districts (SWCD) conduct PDG meetings inpartnership with USDA-Natural Resources Conservation Service (NRCS).

      Eachcounty in Texas holds the public meetings annually and meeting information willsoon be posted on the Texas NRCS website (www.tx.nrcs.usda.gov). A list of PDG meetings alreadyscheduled for the High Plains and South Plains regions is included in thefollowing table.

 

2008EQIP PDG Meeting Dates & Locations


County:

Date:

Time:

Location:

Randall

10/9/07

9:30 AM

Farm Bureau 1714 5th Ave., Canyon

Motley

10/9/07

8:00 AM

USDA Service Center, Matador

Hall

10/9/07

9:00 AM

1st B&T Bronze Room, Memphis

Childress

10/9/07

2:00 PM

Childress Service Center Annex, Childress

Roberts

10/9/07

7:30 AM

KNT Cafˇ, Miami

Carson

10/9/07

2:00 PM

USDA Service Center, Panhandle

Floyd

10/9/07

9:00 AM

USDA Service Center, Floydada

Hansford

10/9/07

1:00 PM

First State Bank, Spearman, Spearman

Kent

10/9/07

5:30 PM

Kent County Courthouse, Jayton

Collingsworth

10/9/07

8:30 AM

Roberson Restaurant Hwy 83, Wellington

Sherman

10/10/07

9:00 AM

Happy State Bank, Stratford

Hardeman

10/10/07

9:00 AM

Community Center, Quanah

Hemphill

10/10/07

6:00 PM

Hemphill County Exhibition Barn, Canadian

Scurry/Borden

10/10/07

1:00 PM

DCOS Room, 3610 College Ave., Snyder

Hutchinson

10/10/07

9:30 PM

Holt School House, Stinnett

Dickens

10/10/07

7:00 PM

USDA Service Center, Spur

Lynn

10/10/07

8:00 AM

Tahoka Housing Authority, Tahoka

Potter

10/11/07

9:30 AM

USDA Service Center, Amarillo

Stonewall

10/11/07

9:00 AM

County Courthouse, Aspermont

King

10/11/07

1:30 PM

Community Center, Guthrie

Dallam

10/11/07

8:00 PM

Bar H Restaurant, Dalhart

Cottle

10/11/07

9:00 AM

USDA Service Center, Paducah

Gray

10/11/07

6:00 PM

Gray Co. Annex, Pampa

Gaines

10/11/07

9:30 AM

USDA Service Center, Seminole

Briscoe

10/11/07

5:00 PM

City Bank (Pioneer Room), Silverton

Hale

10/12/07

11:00 AM

USDA Service Center, Plainview

Fisher

10/15/07

10:00 AM

Roby Community Center, Roby