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Monterey, CA – RealEstateRama – United States Representative Jimmy Panetta (CA-19), along with Rep. Mike Kelly (PA-16), reintroduced the bipartisan Preserving Family Farms Act.  The legislation would help family-owned farms continue operations after a family member has passed by easing the burden of the estate tax.

The Section 2032A Special Use Valuation is a tool to help farm and ranch families preserve their businesses and manage their estate tax liability.  The provision allows farmers and ranchers to pay estate taxes on the value of farmland based on agricultural use, rather than what it would be worth if it were sold for development.  But current tax law has not kept pace with the skyrocketing value of cropland.

The Preserving Family Farms Act would modernize the special use valuation provision of the estate tax by increasing the amount of farmland that can be valued for farming operations rather than development value.  This would protect family-owned farmland by assessing estate taxes on the actual value of their businesses that they, in many cases, have spent decades cultivating.

“Outdated provisions in our tax laws are punishing family farms and causing them to split up or sell the land upon which they have spent generations working and building up,” said Rep. Panetta.  “My Preserving Family Farms Act would ease the burden on these operations, by ensuring that farms are appraised by the value of their business, rather than for development.  This commonsense and straightforward change would preserve family farms and agricultural lands that are the backbone of our food system and communities in California’s 19th Congressional District.”

“Agriculture is a major industry in Pennsylvania, and farming is the lifeblood of many rural communities in my district. Pennsylvania families shouldn’t be forced to sell off or split up their farm that has often been in their name for generations,” said Rep. Kelly. “To support the next generation of American farmers, we must do everything we can to ensure that family farms aren’t burdened with a sky-high estate tax should a loved one pass away.  This bill will go a long way toward helping hardworking folks stay on their land in their time of need and for generations to come.”

“The American Farm Bureau Federation applauds your leadership in re-introducing the Preserving Family Farms Act of 2023, to provide targeted estate tax relief for farmers, ranchers and other family businesses by expanding IRS Code Section 2032A Special Use Valuation,” said President of the American Farm Bureau Federation Zippy Duvall.  “Farm and ranch families who hope to stay in business, following the death of a family member, should be able to pay estate taxes on the value of their current business, not what their land might be worth if it were sold for another use.”

“America’s cattle producers deserve certainty in the tax code, especially when it comes to succession planning. NCBA is committed to fighting for common sense tax solutions, including the expansion of IRS Code Section 2032A Special Use Valuation, to allow more producers to secure greater relief from the estate tax and preserve family-owned cattle operations for generations to come,” said National Cattlemen’s Beef Association President Todd Wilkinson.  “We applaud Representatives Panetta and Kelly for their leadership and dedication to protecting future generations of agricultural producers through the introduction of the “Preserving Family Farms Act of 2023.”

“California’s farms and ranches are overwhelmingly family operations, and protecting family agricultural traditions requires an estate tax structure that supports family farm succession,” said California Farm Bureau President Jamie Johansson.  “The Special Use Valuation that farm families can use to reduce estate taxes needs to be adjusted to reflect the rising values of agricultural properties. Let’s protect our family farms from being lost to burdensome taxes and keep our agricultural lands in production.”

“On behalf of the ranching families who steward 38 million acres of California rangeland, the California Cattlemen’s Association applauds Congressman Panetta’s introduction of the Preserving Family Farms Act. Currently the estate tax results in vast swaths of rangeland lost to development every day; the Act’s tax reforms will ensure that ranching families have the opportunity to conserve working rangelands and protect open space in California,” said California Cattlemen’s Association Executive Vice President Billy Gatlin.  “CCA fully supports the Preserving Family Farms Act and thanks Congressman Panetta for his leadership in ensuring the sustainability of family ranching and the protection of the open spaces all Californians enjoy.”

“Farming land values have increased dramatically since Section 2032A was originally conceived as a relief valve for estate tax purposes,” said Monterey County Farm Bureau President Norm Groot.  “For the Salinas Valley (CA) landowners, whose land has been farmed for multiple generations, land values have escalated dramatically due to productive soils, climate, and available water resources.  Section 2032A no longer serves local family farms adequately when land use calculations exceed the current $1.16 adjustment level.  This increase to the 2032A allowance provision will help keep our family farms productive and stay within the family from generation to generation.”

“Monterey County Cattlemen’s Association applauds Congressman Panetta for reintroducing the Preserving Family Farms Act,” said President Monterey County Cattlemen’s Association Mason Mallory.  “It only makes sense to value rangeland based on its value as forage for livestock rather than its potential value as a commercial property.  This adjustment, in Section 2023A, reflects the increase in present day land values, it will not only provides ranchers the opportunity to continue their multi-generational ranching operations but will help preserve open space to keep ecosystems intact.  This is a win for ranchers and a win for the multiple threatened and endangered species that depend on rangelands to survive.”

“Far too often, our family farms and ranches are lost because of inheritance taxes,” said San Luis Obispo County Farm Bureau Executive Director Brent Burchett.  “When we lose the ability to grow food in this country, we’re jeopardizing America’s national security. This legislation will help our producers pass along their operations to the next generation.”

“The Santa Cruz County Farm Bureau would like to thank Congressman Jimmy Panetta for reintroducing the Preserving Family Farms Act.  This act is an important step to protect and preserve farmland by ensuring agricultural land remains affordable for future generations,” said Santa Cruz County Farm Bureau President Dennis Webb.

“Land prices are escalating at an exponential rate far and above the economic return of a multi-generational family’s Agricultural operation’s ability to plan and save to pay estate taxes,” said Scott Violini, fourth generation Central Coast Cattle producer.  “Reintroduction of “the Preserving Families Farm Act” with an increase in the 2032A special valuation for family farms will keep the value of the land as Agricultural and not the value of potential development.  We are seeing far too many families divided and ranches dispersed to others that have no Agricultural interests in the land or the environment.  Family Farms drive the economy, we feed the world, and this legislation will help keep it that way.”

Although Rep. Panetta authored and introduced the bill in the 117th Congress, the legislation unfortunately stalled in the Ways and Means Committee.  Rep. Panetta and his congressional colleagues will continue to work to pass this bill as a way to help provide fairness from the tax code for our farmers and ranchers.


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