Family Farms Protection Bill

Legislation to preserve family farms introduced in Congress.

Several agriculture groups announced strong support for the Preserving Family Farms Act of 2019. Introduced by U.S. Representatives Jimmy Panetta (D-Calif.) and Jackie Walorski (R-Ind.), this bipartisan legislation would expand IRS Code Section 2032A to allow more ranchers and farmers to take advantage of the special-use valuation and protect family-owned businesses from the devastating effects of the death tax.

National Cattlemen’s Beef Association (NCBA) President Jennifer Houston says ranchers and farmers are appreciative of death tax relief passed as part of the Tax Cuts and Jobs Act of 2017 (TCJA), but many cattle producers are either still vulnerable to the death tax or will be vulnerable when the TCJA exemption limits revert back in 2026.

“America’s beef producers should never be forced to sell any of their family’s farm, ranch or business due to a death of a family member,” Houston says. “NCBA is committed to the fight to defend family ranches and farms and has long advocated for sound policies that will preserve family-owned beef operations for generations to come. I applaud Representatives Panetta and Walorski for their leadership and dedication to protecting future generations of agricultural producers who seek to preserve a multigenerational legacy by maintaining a family-owned business.”

In the Tax Reform Act of 1976, Congress recognized the disproportionate burden of the death tax on agricultural producers and created Section 2032A as a way to help farmers keep their farms. However, the benefits of Section 2032A have been stymied over the years as the cap on deductions has failed to keep pace with the rising value of farmland. The Preserving Family Farms Act of 2019 increases the maximum amount allowed under the exemption from $750,000 to $11 million (indexed for inflation), thus reviving a critically important tool in the toolbox for farm and ranch families across the United States. If enacted, this legislation will provide a permanent solution to an issue that has long plagued our nation’s cattle producers.

American Farm Bureau Federation (AFBF) President Zippy Duvall says: “Farm and ranch families often face a significant financial burden when they have to pay estate taxes. Farm families should be able to pay based on how their land is actually used, rather than its potential value as commercial property such as a shopping center. AFBF commends Representatives Panetta and Warlorski for introducing the Preserving Family Farms Act of 2019, which will give more families hope they can hold on to the farm when a loved one passes. We strongly urge House members to co-sponsor this important bill.”

“Allowing more farmland to qualify for special use valuation would elevate this provision of the tax code to its proper place as a helpful estate planning tool,” Duvall adds.

Editor’s note: This article was compiled from news releases from NCBA and AFBF.