TEFAP Alliance Blog

February 2002

Washington Update – February 20, 2002
In This Issue:
• Farm Bill Heads to Conference
• Reauthorization needed to Boost Funding
• No Decision Yet on FY02 Administrative Funding
• Tax Deduction for Food Donations Still Alive

Farm Bill Heads to Conference
A House-Senate conference committee is now considering the 2002 Farm Bill following Senate passage of the legislation on February 13. The Farm Bill, also known in the House as the Farm Security Act of 2001 (H.R. 2646) and in the Senate as the Agriculture, Conservation, and Rural Enhancement Act of 2001 (S. 1731), provides for the reauthorization of TEFAP over the life of the legislation, which is five years in the Senate bill and 10 years in the House bill.
Differences between the two bills also remain in the funding levels. The House bill includes $140 million for TEFAP food purchases, while the Senate bill boosts that figure to $150 million. Both bills allow USDA discretion to permit $10 million of the food funds to be used by states for processing, storing, transporting, and distributing commodities. In addition, both bills provide for $50 million annually for “processing and storage,” replacing the term “administrative,” when it comes to operational funding.
Senate conferees are: Harkin (D-IA), Leahy (D-VT), Daschle (D-SD), Conrad (D-ND), Lugar (R-IN), Cochran (R-MS), and Helms (R-NC). Key House conferees are: Combest (R-TX), Goodlatte (R-VA), Stenholm (D-TX), and Clayton (D-NC).

Reauthorization needed to Boost Funding
Passage of the Farm Bill will likely be necessary to increase TEFAP funding next year. In the Bush Administration’s fiscal year 2003 budget, TEFAP funding is held at the current level of $150 million, with $100 million requested for food purchases and $50 million for administration/distribution costs. Passage of the Farm Bill, with its higher authorization levels for food dollars, would be needed to boost TEFAP in fiscal year 2003.

No Decision Yet on FY02 Administrative Funding
As of February 19, USDA’s Food and Nutrition Service had still not decided whether to allow states to convert up to $5 million of fiscal year 2002 food funds for administrative purposes. Although states and local agencies are in need of additional funds to move bonus product anticipated for delivery later this year and the fiscal year 2002 agriculture appropriations act gives USDA authority to permit the conversion, the decision is still under review.

Tax Deduction for Food Donations Still Alive
Congress may still consider a change in the law this year that would allow donors to claim the fair market value of food given to charity. A bill introduced early last year (S. 37) by Senator Richard Lugar (R-IN) was recently incorporated into a broader package in the Senate. The Charity Aid, Recovery, and Empowerment – or CARE – Act of 2002 is poised for passage as an alternative to the Bush Administration’s proposed economic stimulus package that died in the Senate last month, according to news reports.
The proposed CARE Act, now numbered S. 1924, contains most of the provisions of Lugar’s S. 37. It allows for a deduction of the fair market value of any “apparently wholesome food” provided as a charitable contribution by a taxpayer. Growers would be able to claim 100 percent of the value of the food on a cash basis.

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WASHINGTON UPDATE is published for the TEFAP Alliance by Weinberg & Vauthier Consulting, 419 West Broad Street, Suite 204, Falls Church, VA 22046; telephone: (703) 532-5700; fax: (703) 532-5780; email: zyweinberg@earthlink.net.

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