COOL Repeal, Section 179 Deductions Part of Big Budget Bill
COOL Repeal, Section 179 Deductions Part of Budget Deal
News is leaking out that Congress will repeal Country of Origin Labeling (COOL) for muscle cuts of meats and make permanent Section 179 depreciation expensing deductions. The provisions are included in the omnibus spending bill that is being rushed through Congress to avoid a Christmas government shut down.
The bill is likely to pass Congress this week and signed by President Obama before the holidays. See farmer reaction here.
The COOL repeal is critical if the United States wants to avoid $1 billion in trade sanctions from Canada and Mexico. For dairy farmers, avoiding such sanctions is crucial to maintaining exports to Mexico, where nearly 30% of all U.S. dairy exports are sent.
The Section 179 depreciation expensing deductions will be made permanent, allowing farmers to expense up to $500,000 annually in depreciation. A few years ago, the limit was reduced to just $25,000. It also includes a five-year extension of the 50% bonus depreciation provision.
Not included in the bill is federal preemption for labeling genetically modified foods (GMOs) or GMO ingredients. Earlier this year, the House of Representatives had passed a comprehensive GMO bill, but the Senate was unable to do so, says Dave Carlin, Senior VP of legislative affairs and economic policy for the International Dairy Foods Association. “Absent a federal preemption, individual states can impose labeling regulations that will needlessly increase costs and confusion for businesses, farmers and consumers,” he says.
Senate Ag Committee leaders have reassured ag interests that a GMO labeling will again be brought up early next year.
