The Crush - May 2021 - 5

STATE & FEDERAL FOCUS

Drought Relief Working Group
The White House announced a new interagency working group
that will address worsening drought conditions in the West and
support farmers and others impacted by ongoing water shortages.
USDA Secretary Tom Vilsack and Interior Secretary Deb Haaland
will co-chair the group, which will focus on collaborative efforts
to build regional, long-term resilience to drought.

Growing Climate Solutions Act
A bipartisan group of U.S. senators on April 20 reintroduced the
Growing Climate Solutions Act, which will " break down barriers
for farmers and foresters interested in participating in carbon
markets so they can be rewarded for climate-smart practices. "
The Senate Ag Committee on April 22 unanimously approved the
bill (S. 1251 text) and it will now be considered by the full Senate.
The bill currently has 43 co-sponsors and support from more
than 60 leading ag and environmental organizations.

American Families Plan & Farms
President Biden on April 28 announced the comprehensive $1.8
trillion American Families Plan, which includes tax reform to
support investments in workers and families such as childcare,
nutrition and higher education.
ACCORDING TO USDA:
*	 The plan will not raise taxes on anyone making less than
$400,000 per year.
*	 The plan addresses the " stepped-up-basis " loophole (see end
of article). Unrealized capital gains are taxed at death above $2
million in gains per couple. This will not affect family farms
that stay in the family.
*	 Under the proposal, over 98% of farm estates will not owe any
tax at transfer, provided the farm stays in the family. For the
2% that would owe, they'd be taxed on their non-farm assets.
How the plan protects family farms and ranches in two ways:
*	 No capital gains taxes at death for family farms. The plan
includes a special protection for family-owned farms and
businesses. It defers any tax liability on family farms as long
as the farm remains family-owned and operated. No tax is
due if the farm stays in the family. No one should have to sell
a family farm they inherit to pay taxes and the president's tax
reform guarantees that.
*	 $2 million exclusion from increased capital gains for all married
couples. The plan also excludes the first $2 million of gains per
couple ($2.5 million if the farm also includes the family home)
from capital gains tax and heirs continue to get step up in basis
on those first $2 million in gains. If an heir decides to sell the
family farm, the first $2 million in gains is tax free.

How the capital gains reforms affect family farms:
*	 A married couple with $900,000 of farm gains and $200,000 of
non-farm gains passes the farm onto their children. No capital
gains taxes are owed, even if they sell the farm because the $1.1
million in gains are below the $2 million per-couple exemption.
*	 A married couple with $3 million of farm gains and $250,000
of non-farm housing gains passes the farm onto their children.
No taxes due as long as the children keep the family farm.
The American Farm Bureau Federation (AFBF) addressed the
plan and the stepped-up basis in an April 29 radio segment/
article. AFBF also published a 36-page report in April with
additional information.

Employers: The Social Safety Net
By Michael Miiller
In response to President Biden's $2 trillion infrastructure plan
(American Jobs Plan), U.S. Senate Minority Leader Mitch
McConnell (R-Ky.) argued Democrats were pursuing proposing
unfettered spending for social causes like childcare. " I'm going to
fight them every step of the way, because I think this is the wrong
prescription for America, " McConnell said.
In California, debt spending is not an option. The California
Constitution requires the budget to be balanced, without
borrowing. But this has not stopped the California Legislature
from taking on the same issues tackled in Biden's national plan.
The difference is in California, employers are asked to provide
that same social safety net, with no public funding whatsoever.
Below are a few of the key bills pending in the state Legislature
requiring employers to provide increased paid leave, create new
leave and require employers to accommodate an employee's
family responsibilities.
* 	AB 95 (Low, D-Silicon Valley)
	 Employees: New bereavement leave.
* 	AB 123 (Gonzalez, D-San Diego)
	 Paid family leave: increased weekly benefits.
* 	AB 995 (Gonzalez)
	 Paid sick days: increased from three to five days annually.
* 	AB 1041 (Wicks, D-Oakland)
	 Family leave. Family means any person identified by the
employee.
* 	AB 1119 (Wicks)
	 Employer accommodation for an employee's family
responsibilities including time off for child care and school
drop-off or pick-up.
If these new burdens on employers were proposed in D.C.,
McConnell might come to miss the Biden approach.

CAWG.ORG 5

https://www.usda.gov/media/press-releases/2021/04/21/white-house-launches-drought-relief-working-group-address-urgency https://www.usda.gov/media/press-releases/2021/04/21/white-house-launches-drought-relief-working-group-address-urgency https://www.fb.org/news/afbf-stepped-up-basis-vital-to-preserving-family-farms https://www.fb.org/news/afbf-stepped-up-basis-vital-to-preserving-family-farms https://www.fb.org/files/FBETC_Stepped-Up_Basis_Report_2021 https://www.agriculture.senate.gov/newsroom/dem/press/release/growing-climate-solutions-act-reintroduced https://www.agriculture.senate.gov/newsroom/dem/press/release/growing-climate-solutions-act-reintroduced https://www.congress.gov/bill/117th-congress/senate-bill/1251/text https://www.agriculture.senate.gov/imo/media/doc/Supporters%20of%20the%20Growing%20Climate%20Solutions%20Act.pdf https://www.whitehouse.gov/briefing-room/statements-releases/2021/03/31/fact-sheet-the-american-jobs-plan/ https://www.whitehouse.gov/briefing-room/statements-releases/2021/04/28/fact-sheet-the-american-families-plan/ https://www.usda.gov/media/press-releases/2021/04/28/american-families-plan-honors-americas-family-farms https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB95 https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB123 https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB995 https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB1041 https://leginfo.legislature.ca.gov/faces/billNavClient.xhtml?bill_id=202120220AB1119 https://www.cawg.org/

The Crush - May 2021

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