As Congressional negotiators continue to meet on a farm policy reauthorization bill (H.R. 2419), the Farm, Nutrition, and Bioenergy Act of 2007, the Senate conferees are suggesting changes to the bill that would include tax breaks and permanent disaster programs, and is paid for with new offsets.

House and Senate leaders have agreed on an additional $6 billion for a package that exceeds $300 billion over the next five years. But the Senate's version asks for $4 billion more in disaster aid and $2.5 billion added in for agricultural tax breaks. In order to pay for these additions, the Senate has found money from three sources. Their first proposal—originally included in President George W. Bush’s fiscal year 2009 budget proposal—raises $6 billion by mandating basis reporting by brokers for transactions involving publicly traded securities. An additional $4.1 billion would come from extending customs and user fees, and a final $2.4 billion is offset by restricting physician referrals to hospitals in which they or their family members have a financial stake.

These revenue suggestions come after the Senate rejected the House’s proposed offset of tightening rules for the reporting of credit card transactions. The House plan would have required "qualified payment facilitators" such as banks that enroll participating merchants in an electronic payment mechanism to provide an information return to both the merchant and the government. The return would include the name and address of each participating merchant that was reimbursed over the previous year for electronic payment and the amounts of each payment.

Despite being included in the president’s fiscal year 2009 budget proposal, the administration was vocal in their opposition to using the credit card offset in the farm bill. They argued that the money it creates should not be earmarked for farm bill spending. NSBA has been working to prevent this recommendation from being used as revenue offset to cover the potential cost of the farm bill.

Details of the agriculture tax package included in the Senate’s recent offer to House conferees was unveiled by Senate Finance Committee Chairman Max Baucus (D-Mont.) and Ranking member Charles Grassley (R-Iowa). The senators said $1.7 billion of the $2.5 billion would go to conservation programs. The proposal would also provide $600 million in tax incentives to help timber companies remain competitive globally, and would allow $200 million in Conservation Reserve Program payments to retired or disabled individuals to be treated as rental payments for tax purposes. As a result, the payments would be excluded from self-employment taxes from a business and could not be used to calculate any potential reductions in retirement or disability checks.

Another provision allows for $280 million to improve tax-exempt "Aggie Bonds" which provide low-interest loans to farmers and ranchers to help retiring farmers who wish to sell their land to young farmers. Most of these measures received overwhelming Senate support in a December vote on the overall farm bill.

Meanwhile, House Agriculture Chairman Collin Peterson (D-Minn.) has stated tax cuts cannot be included in the final bill and he does not believe the farm bill could pass the House with tax cuts included. He feels the Senate’s provisions could be dealt with in separate legislation. A final decision on the funding deal needs to be completed by April 16 in order to move the farm bill before the expiration of several farm programs on April 18.