Grassley's proposals reflect his ongoing effort to promote initiatives to help family farmersprosper over the long run, in addition to his work this summer to secure an emergency relief packagefor family farmers in Iowa who are struggling to stay in business due to record-low prices. Duringaction today by the Senate's tax-writing committee, Grassley secured support for the following twoitems. Each item was introduced earlier this year as a free-standing measure.
Farm and Ranch Risk Management AccountsThis amendment would establish tax-deferred savings accounts to help farmers manage income and price fluctuations. Grassley'sproposal would let eligible farmers contribute up to 20 percent of their taxable income. Funds could accumulate in the FARRM account for five years and be taxed uponwithdrawal. "Obviously this year is not profitable for farmers, and it is critical that Congressand the President respond with a substantial cash payment on top of existing farm programpayments that will reach farmers' pockets. But in the future, these FARRM accounts wouldhelp cash-strapped farmers survive the swings in the marketplace," Grassley said.
Biomass Tax CreditThis amendment would foster the development of biomass as analternative source of energy. Biomass includes wood chips, agricultural byproducts such asswitch grass and untreated construction debris. Grassley's proposal would expand the taxcredit he has secured for wind energy production so that it also applied to biomass crops thatare grown solely for the purpose of combustion.
Grassley developed the biomass initiative following a visit last year to Iowa's CharitonValley Biomass Project. "The economic and environmental potential is tremendous," hesaid. A recent study found biomass crops could produce $2-5 billion in additional farmincome, and supply as much as seven percent of the total electricity generated in the UnitedStates. Grassley's effort was endorsed by environmental groups including the Union ofConcerned Scientists and the Natural Resources Defense Council. The chairman's mark alsoincorporated Grassley's five-year extension of wind energy production tax credit.
Grassley's initiatives will be part of the $792 billion tax cut proposed by Finance CommitteeChairman Bill Roth of Delaware. As part of the overall bill, Grassley also won the chairman'sbacking for his legislation to establish a tax deduction for the cost of long-term care insurance andhis bill to help small businesses provide pension coverage to their employees. Grassley is a seniormember of the tax-writing committee.