H.R. 3957, Emergency Citrus Disease Response Act

H.R. 3957

Emergency Citrus Disease Response Act

Committee
Ways and Means

Date
September 20, 2016 (114th Congress, 2nd Session)

Staff Contact
John Huston

Floor Situation

On­­­­ Tuesday, September 20, 2016, the House will consider H.R. 3957, Emergency Citrus Disease Response Act, under suspension of the rules. H.R. 3957 was introduced on November 5, 2015, by Rep. Vern Buchanan (R-FL) and was referred to the Committee on Ways and Means.

Bill Summary

H.R. 3957 allows for full tax deduction for the cost of replanting lost or damaged citrus plants if investors raise capital for replanting costs and the farmer has at least a 50 percent equity interest in the property. The deduction would also extend to purchasers of land with diseased trees. The bill would be effective upon enactment and would sunset on December 31, 2025.

Background

Citrus greening is one of the more serious diseases of citrus. The bacteria itself is not harmful to humans but the disease has harmed trees in Florida dating back to 2005. Other than tree removal, there is no effective control once a tree is infected with the disease and there is no known cure. In areas of world affected by citrus greening the average productive lifespan of citrus trees has dropped from 50 or more years to 15 or less. The trees in the orchards usually die 3-5 years after becoming infected and require removal and replanting. An infected tree produces fruit that is unsuitable for sale as fresh fruit or for juice.[1]

According to University of Florida Institute of Food and Agricultural Sciences, Florida’s citrus growers say as much as 90 percent of their acreage and 80 percent of their trees are infected by the deadly greening disease. Florida has lost about $7.8 billion in revenue, 162,200 citrus acres and 7,513 jobs to citrus greening since 2007. Orange production dropped from 242 million to 104 million boxes in 2014.[2]

Under current law, individuals are allowed an immediate deduction for the cost of replanting diseased trees, but the citrus farmer must bear the full cost to be eligible for the deduction.  H.R. 3957 would allow citrus farmers to use this deduction even if they bring in investors to raise capital for replanting costs, as long as the grower owns at least a 50 percent stake in the property.

According to the bill sponsor, “This commonsense legislation makes it less costly for citrus farmers to replant crops decimated by disease. I’m especially pleased that a dozen of my colleagues from Florida joined me to help protect the livelihoods of the 76,000 Floridians directly and indirectly employed by the citrus industry.”[3]

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[1] See USDA, Citrus Greening Background, August 10, 2016
[2] See IFAS News, “Florida citrus growers: 80 percent of trees infected by greening,” April 18, 2016.
[3] See Rep. Vern Buchanan Press Release, “Buchanan Introduces Bill to Revitalize Citrus Industry,” November 6, 2015.

Cost

The Congressional Budget Office (CBO) estimates that enacting the legislation would reduce revenues, thus increasing federal budget deficits, by $30 million over the 2016-2026 period.

Additional Information

For questions or further information please contact John Huston with the House Republican Policy Committee by email or at 6-5539.