Press Release

FOR IMMEDIATE RELEASE
October 4, 1999
For additional information, contact:
Larry Berman (401) 729-5600

KENNEDY SPONSORS LEGISLATION TO PREVENT NEGATIVE TAX IMPACT OF GOVERNMENT'S CLASS ACTION SETTLEMENT WITH BLACK FARMERS

WASHINGTON – Congressman Patrick J. Kennedy (D-RI) announced today that he is a co-sponsor of the Black Farmers Fairness Act (H.R. 2233), legislation designed to spare African-American farmers the negative economic and tax consequences resulting from their successful class-action settlement with the United States Department of Agriculture (USDA).

On April 14, the District of Columbia's District Court determined that thousands of African-American farmers had been discriminated against by the USDA. The judge awarded each affected farmer a $50,000 settlement, as well as forgiveness for debts resulting from discrimination for the past injustices.

The legislation would lift the tax burden -- income and estate taxes -- associated with both cash payment and the debt forgiveness aspects of the settlement. The legislation also releases class members from having to include the settlement benefits in determining eligibility for federal assistance programs.

"Regrettably, this settlement has negative economic and tax consequences resulting from the lump-sum payment," said Kennedy. "I support this legislation because the federal government should not profit from its own civil rights infraction."

The class-action settlement was designed to end decades of complaints from black farmers who said they were shut out of USDA loan programs, disaster assistance and other farm aid because of their race. In 1920, 14 percent of farmers in the United States were black. By 1992, that number had dwindled to 1 percent, and today it is even lower.

"This Congress has an obligation to finish what it started last year when we voted to approve the settlement," said Kennedy. "We have the opportunity to right a wrong and ensure that those who were denied the opportunity to pursue the American Dream are not hurt further by this settlement."

Black farmers documented countless instances of discrimination, including racial slurs by USDA employees, and being told that the government was out of money. Nearly 15,000 black farmers have applied for a share of the multibillion-dollar federal settlement.

Kennedy is one of 19 co-sponsors of the bill introduced by Congressman J.C. Watts Jr. (R-Okla.).

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