What's Happening in Washington

By Cary Greene

It’s been a hectic month in the nation’s Capitol, and most of the action has been good for America’s wineries.  The “fiscal cliff” bill included a provision that provides reasonable protection for families looking to pass their businesses to the next generation, agricultural labor reform is back on the agenda, and the Senatehas plans to draft a budget for the first time in years and could give us a clear window into their plans on excise tax rates.

Estate Tax Compromise

Until a last minute compromise included in the “fiscal cliff” law, Estate Tax rates were set to revert to a 55% rate on estates ofonly $1 million or larger. The compromise changes the maximum rate to 40% on estates larger than $5 million, indexedto inflation.  Indexing is important because it ensures that estates subject to the tax remain equivalent in value to a $5 million estate in the base year, or 2010.  While the compromise is certainly not full repeal, it remains far better than the alternative.

Agricultural Labor Reform

With Congress focused on immigration, wineries have a unique chance to work with our partners in the agricultural community to improve our laws governing immigrant labor.  WineAmerica remains a part of the Agriculture Coalition for Immigration Reform (ACIR), but is also in the process of joining a new coalition, the Agriculture Workforce Coalition (AWC).

If we hope to achieve lasting success on agricultural labor reform, American wineries need to try to speak in unison with the larger agricultural community.  WineAmerica agrees with AWC’s proposal for dealing with reform, and we concur that laying out our principles and being flexible on the specifics is the right way forward.  With the Senate advancing ahead with its plan for comprehensive immigration reform, WineAmerica wants to make sure we’re part of the solution.

Senate Budget

If the Senate proceeds ahead with a crafting a budget, which seems likely at this point, it will provide WineAmerica with a window into their plans on excise taxes and the future of TTB.  As we noted early last year, federal budgets tend to be the place where the ghosts of bad policy reemerge before being introduced as actual proposals.  While budgets set priorities, they don’t make law.  This makes them ideal policy navigators.  WineAmerica typically pays close attention to three budget items (1) plans for excise tax rates, (2) plans for industry “user fees”—assessing the industry for the cost of mandatory regulation, and (3) TTB funding levels—to determine TTB’s ability to ensure timely approvals, formulas, and licenses.  We will be paying attention to all three items as the Senate begins its drafting process, and will do our part to ensure that the Senate’s priorities help American wineries.

New Food Safety Proposals Will Not Apply to Wineries

By Cary M. Greene

The Food & Drug Administration (FDA) issued proposed regulations last week that would implement the Food Safety Modernization Act (FSMA) passed in January 2011.  WineAmerica has been urging its members to register their facilities with FDA this winter and also reporting on why the registration requirements were a legislative victory for American wineries.  With FDA’s initial release of FSMA proposed regulations, the victory for wineries is becoming clearer.

FDA is proposing new Good Manufacturing Standards for most “food” producers.  Ordinarily, this would include wineries, but FDA’s proposal specifically notes that alcohol beverage producers, including wineries, are largely exempt.

FDA’s new proposed produce handling requirements, likewise only covers fruit and vegetables grown for raw consumption.  Produce that is not sold as a raw agricultural commodity is specifically exempted from the new standards.  This means that wineries will be completely free from the new handling requirements, assuming they don’t sell grapes for the fresh market, since wine is considered “processed” under FDA rubric.

These new proposals are a perfect illustration of the value WineAmerica can provide.  Our efforts to exclude wine from the FSMA are now ensuring that wineries can continue to do business without the regulatory confusion that would be created by the entry of FDA into wine regulation.

Congress Sidelines Specialty Crop Funding in Tax Legislation

The following is a press release from the Specialty Crop Farm Bill Alliance, of which WineAmerica is a member.


For Immediate Release – January 2, 2013

Congress Sidelines Specialty Crop Funding in Tax Legislation

Tax measure extends 2008 Farm Bill, but excludes key specialty crop programs

WASHINGTON, DC – The passage of a fiscal package late Tuesday evening excluded key specialty crop priorities. While the bill does avert the dreaded “fiscal cliff,” efforts to roll a new five-year Farm Bill into the bill were rejected in favor of a nine month extension of the 2008 law. The extension does not include funding for certain expiring programs such as the Specialty Crop Research Initiative and Clean Plant Network.

“It’s disappointing, to say the least,” said Mike Stuart, Florida Fruit & Vegetable Association president and Alliance Co-Chair. “We had worked very hard with key members in the House and Senate to craft a Farm Bill that was fiscally responsible and gave producers resources, such as research funding for pest and disease programs, that they need to remain competitive and to ensure a safe, healthful supply of fruits and vegetables.”

The tax package bill was passed by a vote of 89-8 in the Senate, and was approved in the House with a vote of 257-167.

The Farm Bill will need to be redrafted in the coming months and reconsidered by both chambers before the September 30, 2013 deadline. The Specialty Crop Farm Bill Alliance will continue to communicate the importance of specialty crop programs to lawmakers on Capitol Hill as this process moves forward in the 113^th Congress.

“While we are frustrated, we look forward to working with both committees and the dozens of members of Congress who helped complete the 2012 Farm Bill,” said John Keeling, National Potato Council executive vice president and CEO, and Alliance Co-Chair. “As has been the case for more than a decade, we will be working to ensure that innovative investments for the 50 percent of American agriculture represented by specialty crops are fairly accounted for in the Farm Bill.”

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The Specialty Crop Farm Bill Alliance is a national coalition of more than 120 organizations representing growers of fruits, vegetables, dried fruit, tree nuts, nursery plants and other products. The alliance was established to enhance the competitiveness of specialty crop agriculture and improve the health of Americans by broadening the scope of U.S. agricultural public policy. For more information, visit www.strongeragriculture.org.