Legislative Updates from AmericanHort

How Politics Are Affecting Your Business Right Now

Senate Passes Bipartisan Infrastructure

Bill Laurie Flanagan & Tal Coley

On August 10, the Senate passed a $550 billion infrastructure plan that would be the biggest burst of spending on United States public works in decades. The bill passed after a bipartisan 69- 30 vote and after months of negotiations but still faces hurdles in the House. House Speaker Nancy Pelosi is currently trying to broker a deal among House Democrats to allow a vote on the reconciliation budget resolution and the infrastructure bill. Nine moderate Democrats, including industry champion Kurt Schrader from Oregon, sent a letter on August 12 urging Pelosi to take up the infrastructure bill immediately. Progressives have indicated they will not vote for the infrastructure bill unless the budget resolution is passed first. The House is due to return from recess on August 23, and it will be interesting to see which viewpoint prevails.

If the infrastructure package does clear both chambers, every state would feel the effects. The package includes approximately $110 billion in new spending for roads and bridges, $73 billion for power grid upgrades, $66 billion for rail and Amtrak, $65 billion for broadband expansion, and $55 billion for clean water. It also includes $21 billion for environmental remediation projects and $15 billion for electric vehicles among other funding. Some horticulture industry-related priorities are as follows:

· Commercial Drivers: A commercial driver pilot program, which is based off the concept of the DRIVE Safe Act bill, is included in the legislation. This program allows for the youngest commercial drivers to travel beyond state lines if certain apprenticeship goals are met. It is seen as a sweetener to entice these drivers to make a career out of commercial driving and increase the pool overall. The DRIVE Safe Act is a legislative priority of AmericanHort.

· Inner City Environments: $100 million a year for five years with funding potentially covering the purchase and planting of trees for urban tree canopy plans for inner city environments.

· Western Water Infrastructure: The bill authorized and appropriates $8.3 billion for FY 2022–2026 for Bureau of Reclamation western water infrastructure. This money is allocated to a variety of priorities to include aging infrastructure, dam safety, groundwater storage, and watershed management programs.

AmericanHort will continue to monitor this bill as it is sent to the House.

Senate Budget Resolution Includes Immigration

Craig Regelbrugge

Before leaving town for the August recess, the Senate passed its FY22 budget resolution on a party line vote. The resolution, intended to tee up a sweeping, $3.5 trillion “human infrastructure” and climate policy package, includes funding and instructions to include legalization of “dreamers,” farm workers and other essential workers, and temporary protected status holders. Presuming the House produces an equivalent resolution, the Judiciary Committees would flesh out the immigration-related details.

The House will return briefly in late August to work on its budget resolution. Ultimately, whether or not legalization provisions advance to become law will depend first on party unity (Democrats cannot lose more than a few votes in the House and cannot lose a single vote in the Senate); and, whether the provisions can be crafted in a way that meets the “Byrd rule” test, which the Senate parliamentarian will determine. All this will make for a lively and interesting September.

Boxwood Pest Seems on the Move

Craig Regelbrugge

AmericanHort has received unofficial word of the detection of boxwood tree moth (Cydalima perspectalis) in several locations in New York State near the U.S./Canada border, just east of St. Catharines, Ontario. This appears to be the result of natural spread from adjacent areas in Canada. USDA and New York State authorities are evaluating response measures.

Landscape and nursery interests in the region are urged to carefully monitor boxwoods and consider applying treatments to boxwoods right away, as the pest’s second generation is likely still feeding but will soon pupate. Detailed information on life cyle, pest identification, and what to do if the pest is detected can be found here: https://www.aphis.usda.gov/aphis/ourfocus/planthealth/ plant-pest-and-disease-programs/pests-and-diseases/sa_insects/ box-tree-moth/box-tree-moth

Two years ago, AmericanHort and its foundation, the Horticultural Research Institute, began advocating for a proactive research effort on this pest. Recently, HRI hosted a box tree moth webinar featuring science, regulatory, and industry updates as part of its tHRIve Series. You can learn more by visiting the tHRIve webpage.

Very Favorable Greenhouse Taxation Outcome in Ohio

Craig Regelbrugge

The state and local tax status of greenhouses is a subject of ongoing interest for AmericanHort and our grower members. On this front, a recent Ohio case has delivered some really good news for Buckeye State growers. We asked attorney Jonathan Brollier, with Bricker & Eckler LLP in Columbus, to summarize the decision. Here is what he had to say:

Commercial greenhouses in Ohio constitute business fixtures, which are not subject to local taxes on real estate. The Ohio Board of Tax Appeals (“BTA”) reached this determination when it considered an administrative appeal regarding the valuation of a large greenhouse facility outside of Oberlin, Ohio. The County Auditor and the local school board appealed the BTA’s decision. Earlier this year, the Court of Appeals with jurisdiction over the case upheld the BTA’s decision. The County Auditor and school board again attempted to appeal from the Court of Appeals to the Ohio Supreme Court, but the Ohio Supreme Court decided in late July 2021 not to accept the case for review. This means the lower court and BTA decisions stand, and the greenhouses at issue in the appeal must not be subject to real property taxes, since the greenhouses constitute business fixtures (which are a type of personal property), not real property (like land and buildings).

The case dates back to the 2015 tax year, and the decision will result in a substantial refund of real estate taxes to the property owner. The property owner in the case had presented appraisal evidence and other testimony to show that the greenhouses would only have been erected if the property owner wanted to grow plants – otherwise, the greenhouses would have been a detriment to the land and would have been disassembled and sold on the secondary market. Because the greenhouses primarily benefited the owner’s horticultural business and would not have been a benefit to the land if the land were used to conduct a different line of business, the greenhouses met Ohio’s statutory definition of business fixtures. A variety of local government organizations had joined the county and the schools in their appeal, but the Ohio Supreme Court opted not to take the case up for review.

Brollier summarized by suggesting that other owners of commercial greenhouses in Ohio may want to evaluate how their county auditors are classifying their greenhouses; it’s possible that similarly situated owners of greenhouses in Ohio may be able to prove that their greenhouses also constitute business fixtures, which are not subject to tax under Ohio law. •