Take Caution Conducting Business with New Customers
Unfortunately, the COVID-19 crisis and the market situation has created additional opportunities for thieves to exploit and scam cattle producers. CCA encourages all to remain cautious and vigilant if they are selling livestock out of state to a new buyer. Thieves can develop sophisticated scams to make transactions appear to be legitimate in an effort to collect and gather as much of your personal information as possible. Be vigilant when working with new customers and aware that scammers are still active during this time.
Prepare Now to Apply for CFAP Direct Relief Payments
USDA’s Coronavirus Food Assistance Program (CFAP) will provide $16 billion in direct economic relief payments to farmers and ranchers suffering the market impacts of the COVID-19 pandemic, with $5.1 billion of that relief earmarked for beef producers. While final details of the program are not yet available and applications are not expected to be accepted until after Memorial Day, the below information will allow you to prepare your application information in advance so you can quickly file your CFAP application once the program opens.
When the CFAP program opens, farmers and ranchers will need to submit applications through their county FSA office. CCA expects that FSA employees will be trained on the CFAP program on May 21-22 and anticipates that CFAP will open for applications after Memorial Day (May 25).
Before FSA offices begin processing applications, ranchers can get a head-start on preparing their application materials.
According to USDA, applicants will need to be prepared with the following information:
- Contact information
- Personal information, including your Tax Identification Number
- Operating structure of your ranch or farm
- Adjusted Gross Income (to ensure eligibility)
- Direct deposit information (to enable payment processing)
The above information will be reported on various USDA forms available on the CFAP website at www.farmers.gov/CFAP (under the “How to Apply Once Signup Begins” heading). While FSA will assist ranchers in filing the forms and may already have this information on file for existing customers, CCA encourages ranchers to familiarize themselves with the forms, to assemble the relevant information and to pre-fill the forms to ensure accurate and efficient processing once the program opens.
Additional information is available at www.farmers.gov/CFAP. USDA has also posted a video of yesterday’s 15-minute CFAP webinar on its YouTube page.
You can find contact information for your county FSA office here (click on the Northern or Southern region and then click on your county to find your county office’s contact information). As FSA offices are open for business by phone appointment only, you should call your county office to schedule an appointment shortly after the application period opens.
Given the program’s funding limitations, CCA encourages all members to prepare their application information as soon as possible and to contact their county Farm Service Agency (FSA) office without delay once the program opens.
House Approves HEROES Act
On Friday, the House of Representatives approved the $3 trillion Health and Economic Recovery Omnibus Emergency Solutions (HEROES) Act. The vote was largely along party lines.
The bill contains several provisions that are opposed by the GOP-lead Senate, and thus is unlikely to be taken up by that chamber. However, the bill does represent the first volley in negotiations regarding the ‘fourth round’ of COVID-19 disaster relief, and therefore notable because it provides some indication of the priorities legislators will seek to include in forthcoming legislation.
CCA affiliate the National Cattlemen’s Beef Association assembled a list of HEROES Act provisions of particular interest to the beef producing community, including:
- Establishment of a statutory dealer trust for livestock
- Support for Farm Stress Programs via state departments of agriculture to expand or sustain stress assistance for individuals engaged in farming, ranching, and agriculture-related occupations
- Direct payments to agricultural producers – appropriating an additional $16.5 billion to the pending CFAP program with an extension for compensation for 85% of actual losses through the 2nd Quarter of 2020 (this would effectively supersede the rumored April 15 that has been discussed for the past few weeks)
- Amendments to the Commodity Credit Corporation to allow for expanded use of funds and additional oversight of any such expenditures by Congress
Again, the HEROES Act is unlikely to be taken up in the Senate, but legislators will almost certainly continue discussing further COVID-19 relief legislation. CCA will continue tracking agricultural provisions such as those listed above and will keep members apprised of any developments.
USDA to Raise Payment Caps Under Coronavirus Food Assistance Program
On April 17, President Trump and Secretary of Agriculture Sonny Perdue announced the Coronavirus Food Assistance Program (CFAP), an economic aid package for farmers and ranchers impacted by the market fallout from the COVID-19 pandemic. CFAP includes $16 billion in direct relief payments to farmers and ranchers, including $5.1 billion earmarked for cattle ranchers.
While few details have been released about CFAP, we do know that USDA was previously contemplating capping relief payments for any given producer at $125,000 per commodity and $250,000 overall. Alarmed by that news, CCA joined other cattlemen’s groups nationwide in calling on USDA to remove those payment caps. Likewise, at the urging of CCA and other agricultural groups, a bipartisan group of Senators and Representatives asked the Administration to remove payment caps under CFAP.
Earlier this month, in an interview with Brownfield Ag News, Secretary Perdue announced that USDA would be increasing those payment caps.
“We’ve heard from many members of Congress on both sides of the aisle indicating they think those payment limits are too stringent,” Perdue said. “We agreed with them and we’ve adjusted those payment limits–and we’ll see those when the rules come out.”
Secretary Perdue did not clarify what the new payment caps would be. Nor have further details of the CFAP program been released to date (including how USDA will calculate price losses for producers). USDA has submitted its proposed CFAP rule to the Office of Management and Budget, however, and CCA expects that details on the program could be released this week.
Of course, there is a risk that larger payment caps for producers could deplete the available $16 billion before some producers are able to access the relief funding. Congress is already working to provide additional ag relief funding to ensure producers are properly made whole. For instance, on April 23, Rep. Austin Scott (R-GA) introduced H.R. 6611, which would provide USDA with $50 billion “to prevent, prepare for, and respond to the COVID–19 pandemic by providing support for agricultural producers impacted by the COVID-19 pandemic, provided that the Secretary shall not apply any limitation on payments made to producers using funding provided under” the bill. As of press time, the bill is co-sponsored by a bipartisan group of 31 Congresspeople.
CCA will keep you apprised of any developments regarding CFAP or further Congressional relief for the agricultural industry.
Governor Newsom Expands Workers Compensation Access for COVID-19 Sufferers
On May 6, Governor Gavin Newsom issued an executive order easing access to workers compensation benefits for employees who contract COVID-19.
Under existing law, injured employees bear the burden of proving that an injury occurred on the job when seeking workers compensation benefits. Governor Newsom’s Executive Order shifts the burden of proof in instances of COVID-19, requiring an employer or the employer’s workers compensation insurance provider to prove that the employee contracted the disease outside the workplace.
The Executive Order is retroactive to March 19—the date on which the Governor’s statewide stay-at-home order was issued—and will remain in effect until July 5. Under the Executive Order, if an employee tests positive for COVID-19 or is diagnosed by a physician as afflicted with COVID-19 (and that diagnosis is confirmed by a test within 30 days of diagnosis), that employee will be presumed to have contracted the disease on the job if the positive test or diagnosis is made within 14 days of the employee performing “labor or services at the employee’s place of employment at the employer’s direction…on or after March 19.”
It should be stressed that the Executive Order is not limited to front-line workers or even merely essential employees but extends to all circumstances in which an employee performs “labor or services at the employee’s place of employment at the employer’s direction.”
The move could prove quite costly to employers and insurers. The Workers’ Compensation Rating Bureau of California estimates that the change could cost anywhere between $2.2 billion to $33.6 billion (though it should be noted that these estimates are based on a full-year time period, whereas the Governor’s Executive Order is effective for less than one-third of that period).
There are two minor silver linings to the Governor’s decree. First, the order falls short of the “conclusive presumption” that some labor groups had advocated; under the Executive Order, an employer or insurer can seek to prove the employee contracted the virus outside of work. Second, the Executive Order could preclude civil litigation against employers, as workers compensation is an exclusive remedy for injured workers.
Governor Issues Executive Order Providing Property Tax Relief
On May 6, Governor Gavin Newsom issued an Executive Order extending property tax deadlines and forgiving penalties for late payment under certain conditions.
Under the Executive Order, if a taxpayer “demonstrates to the satisfaction of the tax collector that the taxpayer has suffered economic hardship, or was otherwise unable to tender payment of taxes in a timely fashion, due to the COVID-19 pandemic, or any local, state, or federal government response to COVID-19,” the taxpayer will not be assessed penalties, costs or interest until May 6, 2021.
The Executive Order applies to “residential real property occupied by the taxpayer” and “real property owned and operated by a taxpayer that qualifies as a small business under the Small Business Administration’s Regulations.” Under SBA’s regulations, a “Beef Cattle Ranching and Farming” operation or a “Dairy Cattle and Milk Production” operation is a small business if annual receipts do not exceed $1 million. “Cattle Feedlots” qualify as small businesses so long as annual receipts do not exceed $8 million.
The Executive Order also gives business owners until May 31, 2020 to file business personal property (BPP) statements without penalty.
While some county tax assessors had previously waived penalties and interest for late property tax payments, those determinations had not been made uniformly statewide. Governor Newsom’s Executive Order was issued in recognition that the 10% penalty for failure to pay property taxes by the April 10 deadline were quite harsh for many taxpayers impacted by COVID-19.