[Congressional Record Volume 144, Number 105 (Thursday, July 30, 1998)]
[Senate]
[Pages S9447-S9449]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DORGAN.
  S. 2388. A bill to amend the Internal Revenue Code of 1986 to provide 
an exclusion for gain from the sale of farmland which is similar to the 
exclusion from gain on the sale of a principal residence; to the 
Committee on Finance.


  legislation to provide exclusion for gain from the sale of farmland

 Mr. DORGAN. Mr. President, a new and disastrous farm crisis is 
roaring through the Upper Midwest. Family farmers are under severe 
assault and many of them are simply not making it. It's not their 
fault. It's just that the combination of bad weather, crop disease, low 
yield, low prices and bad federal farm policy is too much to handle. 
Under the current federal farm law there is no price safety net. 
Farmers are--as they were in the 1930's --at the mercy of forces much 
bigger than they are.
  The exodus occurring from family farms in the Upper Midwest is heart-
breaking and demands the immediate attention of this Congress. We need 
to address this problem both within the farm program and in other 
policy areas as well.
  For example, Mr. President, there's a fundamental flaw in the tax 
code that we need to fix. It adds insult to injury for many of these 
farmers. You see, too often, these family farmers are not able to take 
full advantage of the $500,000 capital gains tax break that city folks 
get when they sell their homes. Once family farmers have been beaten 
down and forced to sell the farm they've farmed for generations, they 
get a rude awakening. Many of them discover, as they leave the farm, 
that Uncle Sam is waiting for them at the end of the lane with a big 
tax bill.
  One of the most popular provisions included in last year's major tax 
bill permits families to exclude from federal income tax up to $500,000 
of gain from the sale of their principal residences. That's a good 
deal, especially for most urban and suburban dwellers who have spent 
many years paying for their houses, and who regard their houses as both 
a home and a retirement account. For many middle income families, their 
home is their major financial asset, an asset the family can draw on in 
retirement. House prices in major growth markets such as Washington, 
D.C., New York, or California may start at hundreds of thousands of 
dollars. As a result, the urban

[[Page S9448]]

dwellers who have owned their homes through many years of appreciation 
can often benefit from a large portion of this new $500,000 capital 
gains tax exclusion. Unfortunately this provision, as currently 
applied, is virtually useless to family farmers.
  For farm families, their farm is their major financial asset. 
Unfortunately, family farmers under current law receive little or no 
benefit from the new $500,000 exclusion because the IRS separates the 
value of their homes from the value of the farmland the homes sit on. 
As people from my state of North Dakota know, houses out on the 
farmsteads of rural America are more commonly sold for $5,000 to 
$40,000. Most farmers plow any profits they make into the whole farm 
rather than into a house that will hold little or no value when the 
farm is sold. It's not surprising that the IRS often judges that homes 
far out in the country have very little value and thus farmers receive 
much less benefit from this $500,000 exclusion than do their urban and 
suburban counterparts. As a result, the capital gain exclusion is 
little or no help to farmers who are being forced out of business. They 
may immediately face a hefty capital gains tax bill from the IRS.
  This is simply wrong, Mr. President. It is unfair. Federal farm 
policy helped create the hole that many of these farmers find 
themselves in. Federal tax policy shouldn't dig the hole deeper as they 
attempt to shovel their way out.
  The legislation that I'm introducing today recognizes the unique 
character and role of our family farmers and their important 
contributions to our economy. It expands the $500,000 capital gains tax 
exclusion for sales of principal residences to cover family farmers who 
sell their farmhouses or surrounding farmland, so long as they are 
actively engaged in farming prior to the sales. In this way, farmers 
may get some benefit from a tax break that would otherwise be 
unavailable to them.
  I fully understand that this legislation is not a cure-all for 
financial hardships that are ailing our farm communities. This 
legislation is just one of a number of policy initiatives we can use to 
ease the pain for family farmers as we pursue other initiatives to help 
turn around the crippled farm economy.
  Again, my legislation would expand the $500,000 tax exclusion for 
principle residences to cover the entire farm. Specifically, the 
provision will allow a family or individual who has actively engaged in 
farming prior to the farm sale to exclude the gain from the sale up to 
the $500,000 maximum.
  What does this relief mean to the thousands of farmers who are being 
forced to sell off the farm due to current economic conditions?
  Take, for example, a farmer who is forced to leave today because of 
crop disease and slumping grain prices and sells his farmstead that his 
family has operated for decades. If he must report a gain of $10,000 on 
the sale of farm house, that is all he can exclude under current law. 
But if, for example, he sold 1000 acres surrounding the farm house for 
$400,000, and the capital gain was $200,000, he would be subject to 
$40,000 tax on that gain. Again, my provision excludes from tax the 
gain on the farmhouse and land up to the $500,000 maximum that is 
otherwise available to a family on the sale of its residence.
  We must wage, on every federal and state policy front, the battle to 
stem the loss of family farmers. Tax provisions have grown increasingly 
important as our farm families deal with drought, floods, diseases and 
price swings.
  I believe that Congress should move quickly to pass this legislation 
and other meaningful measures to help get working capital into the 
hands of our family farmers in the Great Plains. Let's stop penalizing 
farmers who are forced out of agriculture. Let's allow farmers to 
benefit from the same kind of tax exclusion that most homeowners 
already receive. This is the right thing to do. And it's the fair thing 
to do.
                                 ______
                                 
      By Mr. WELLSTONE:
  S. 2389. A bill to strengthen the rights of workers to associate, 
organize and strike, and for other purposes; to the Committee on Labor 
and Human Resources.


                       fair labor organizing act

 Mr. WELLSTONE. Mr. President, I rise to introduce a bill, the 
Fair Labor Organizing Act, to strengthen the basic rights of workers 
freely to associate, organize and to join a union. The bill would 
address significant shortcomings in the National Labor Relations Act. 
These shortcomings amount to impediments to one of the most fundamental 
ways that working people can seek to improve their own and their 
families' standard of living and quality of life, which is to join, 
belong to and participate in a union.

  Mr. President, in the past few years, working men and women across 
the country have been fighting and organizing with a new energy. They 
are fighting for better health care, pensions, a living wage, better 
education policy and fairer trade policy. They also are fighting and 
organizing to ensure that they have the opportunity to be represented 
by a union through which they can collectively bargain with their 
employers. Much of this organizing is taking place among sectors of the 
workforce, and among portions of our working population, that have not 
previously been organized. I think these new efforts are part of what 
really is a new civil rights and human rights struggle in our country. 
It is an important and positive historical development. There is 
probably no clearer indication that the impact of this development is 
being felt, and that many of these efforts are succeeding, than some of 
the attacks in the current Congress on unions representing the 
country's working people.
  Why have we seen so many bills with Orwellian titles such as the TEAM 
Act, which has little to do with employer-employee teamwork and a lot 
more to do with company-dominated labor organizations? Such as the 
``Family Friendly Workplace Act,'' which really isn't family friendly, 
but would reduce working families' pay and undercut the 40-hour 
workweek? Such as the so-called SAFE Act, which doesn't promote safety 
but actually would roll back well-established and necessary OSHA 
protections?
  Why does the majority in Congress seem so desperate to single out 
unions to suppress their political activities at the same time they 
maneuver to kill genuine political campaign finance reform?
  It is because unions are succeeding. That is a good thing because in 
my view, when organized labor fights for job security, for dignity, 
justice and for a fair share of America's prosperity, it is not a 
struggle merely for their own benefit. The gains of unionized workers 
on basic bread and butter issues are key to the economic security of 
all working families.
  How can it be that as many as 10,000 Americans lose their jobs each 
year for supporting union organizing when the National Labor Relations 
Act already supposedly prohibits the firing of an employee to deny his 
or her right to freely organize or join a union? If more than four in 
10 workers who are not currently in a union say they would join one if 
they had the opportunity, why aren't there more opportunities? Since we 
know that union workers earn up to one-third more than non-union 
workers and are more likely to have pensions and health benefits, why 
aren't more workers unionized when the new labor movement is correctly 
focused on organizing?
  The answer to these basic questions is this: we need labor law 
reform. We need to improve the National Labor Relations Act (NLRA).
  The Fair Labor Organizing Act would achieve three basic goals. First, 
it would help employees make fully informed, free decisions about union 
representation. Second, it would expand the remedies available to 
wrongfully discharged employees. Third, it would require mediation and 
arbitration when employers and employees fail to reach a collective 
bargaining agreement on their own.
  It is late in the current Congress. My bill may not receive full 
consideration or be enacted into law this year. But I believe it is 
important to set a standard and place a marker. Workers across America 
are fighting for their rights, and many are finding that the playing 
field is tilted against them. The NLRA does not fully allow them fair 
opportunity to speak freely, to associate, organize and join a union, 
even though that is its intended purpose. I have walked some picket 
lines during the

[[Page S9449]]

past two years. I have joined in solidarity with workers seeking to 
organize. I have called on employers to bargain in good faith with 
their employees during disputes. I intend to continue doing so, and I 
urge colleagues to do the same. At the same time, it is clear to nearly 
any organizer and to many workers who have sought to join a union that 
the rules in crucial ways are stacked against them. My bill seeks to 
address that fact.
  First, it is a central tenet of U.S. labor policy that employees 
should be free to make informed and free decisions about union 
representation. Yet, union organizers have limited access to employees 
while employers have unfettered access. Employers have daily contact 
with employees. They may distribute written materials about unions. 
They may require employees to attend meetings where they present their 
views on union representation. They may talk to employees one-on-one 
about how they view union representation. On the other hand, union 
organizers are restricted from worksites and even public areas.
  If we want people to make independent, informed decisions about 
whether they should be represented by a union, then we have to give 
them equal access to both sides of the story. This bill would amend the 
National Labor Relations Act to provide equal time to labor 
organizations to provide information about union representation. Equal 
time. That means that an employer would trigger the equal time 
provision that this bill would insert into the NLRA by expressing 
opinions on union representation during work hours or at the worksite. 
The provision would give a union equal time to use the same media used 
by the employer to distribute information, and would allow the union 
access to the worksite to communicate with employees.
  The second reform in the bill would toughen penalties for wrongful 
discharge violations. It would require the National Labor Relations 
Board to award back pay equal to 3 times the employee's wages when the 
Board finds that an employee is discharged as a result of an unfair 
labor practice. It also would allow employees to file civil actions to 
recover punitive damages when they have been discharged as a result of 
an unfair labor practice.
  Third, the bill would put in place mediation and arbitration 
procedures to help employers and employees reach mutually agreeable 
first-contract collective bargaining agreements. It would require 
mediation if the parties cannot reach agreement on their own after 60 
days. Should the parties not reach agreement 30 days after a mediator 
is selected, then either party could call in the Federal Mediation and 
Conciliation Service for binding arbitration. I believe that this 
proposal represents a balanced solution--one that would help both 
parties reach agreements they can live with. It gives both parties 
incentive to reach genuine agreement without allowing either side to 
indefinitely hold the other hostage to unrealistic proposals.
  Mr. President, this bill would be a step toward fairness for working 
families in America. The proposals are not new. I hope my colleagues 
will support the bill.
                                 ______